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US housing mortgage market growing thanks to improved economic conditions

Press Release   •   Nov 01, 2013 11:34 GMT

The US housing mortgage market has been forecast to increase at a compound annual growth rate (CAGR) of 14.69% through 2016, driven by the improving demand for home loans, and the declining rate of foreclosures for home loans with mortgage companies.

Since the sub-prime mortgage crisis of 2008, the foreclosure rate has increased at a rapid pace. The high rate of foreclosure has led to the oversupply of housing, as it implies a large number of distressed properties entering the market.

However, with the improving job market and better economic conditions, the rate of foreclosures is decreasing. This will eventually drive up housing prices in the US in the future.

Mortgage lending is a major sector finance in the United States, and many of the guidelines that loans must meet are suited to satisfy investors and mortgage insurers. Mortgages are commercial paper and can be conveyed and assigned freely to other holders.

In the US, the Federal government created several programs, or government sponsored entities, to foster mortgage lending, construction and encourage home ownership.

These programs include the Government National Mortgage Association, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. These programs work by offering a guarantee on the mortgage payments of certain conforming loans.

A major challenge currently facing the US housing mortgage market is the high incidence of foreclosures due to high default rates. This is, in turn, increasing the supply of houses in the market, which will eventually drive down the housing prices even further.

Key companies currently dominating the US mortgage market include Wells Fargo & Co., JP Morgan Chase & Co, US Bancorp and Bank of America Corp.

For more information on the US housing mortgage market, see the latest research: US Housing Mortgage Market

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