Real estate market slow to respond to gov't plan by Radka Konkolova

The United States are always facing the credit crisis. It has been the worst crisis since quite long time. All of these happened because banks have been not as strict and rigorous in mortgages’ and loans’ offers and provisions. Probably everybody knows that in the United States borrow money from state or private lenders, is much easier than in other parts of the world, e.g. in Europe.

So American citizens had realized borrowing money is advantage for most of them, because they have needed money anyway and there had been not very strict conditions for them to receive money from banks, so what is the reason to keep away from such offer? Also interest rates were on quite low level, so there were not as high interest and fees. And because nowadays living is more and more expensive, most of American thought this solution could make their financial situation better and they would be able to afford to buy new house or something they like to possess. But later the situation got really bad. Most of borrowers weren’t capable to repay the borrowed amount.

That time people also used to buy houses and flats, because there were also some advantages and benefits for homebuyers. Now the situation has changed. It is not as advantageous and instead of buying new houses people have to sell them or let them foreclosed.

Mortgages offers, interest rates as well as clients’ interest depend on the market progress and on exchange and on value of its indexes, too. Everything from mentioned is very unpredictable, so the situation can change very fast.

Some people are trying to get rid of their homes, so they must come with the price what others are willing to accept. And it is not easy these days, because people want to buy cheaper houses, but on the other hand sellers can’t cut prices too much, because it would be inconvenient for them and they would earn a loss.

According to some economists a market is a system of subjects and of correlation among them. It is place where demand meets the supply and vice versa. It is also a mechanism which is able to exist and recover without any derogation. Anyway in this case the government stimulates the market mechanism and orders some rules and restrictions. But it seems to me, this doesn’t help people very much and they are probably a bit sceptic of it. And they are also afraid, angry and nervous about this situation and also are asking how long it will last…

related story: http://news.yahoo.com/s/ap/20080921/ap_on_bi_ge/financial_meltdown_housing;_ylt=AsQTK0B51SdoSngE0AqAe0Ss0NUE

by Radka Konkolova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova