Home equity loan news: Greenspan speaks about home values

[Feb 13, 2011.]

 

Former Federal Reserve Chairman Alan Greenspan spoke in Washington this week about the state of the economy and the need for home prices to rise. "Home prices will have to rise unequivocally and perhaps by 10 percent or more before signs of a full-fledged housing recovery become unambiguous." Greenspan, one of the most experienced economists in the world, has been faulted with allowing the housing bubble that eventually burst, leaving the US housing market wrecked.

Two sectors of the economy impact sentiment more than any of the others. The housing market is the one that hits home for most people. A home is often the largest and most valuable asset affecting individual net worth. The employment market also has a significant impact. Good news about unemployment can boost the economic outlook overall.

January's unemployment number dropped from 9.4 percent to 9.0 percent, much better than expected. Also surprising was that non-farm productivity hit its highest mark since 2002. The economy seems to be growing faster this quarter. But until housing stabilizes, home owners will not feel completely secure.

According to Lender Processing Services, a company which offers lenders default solutions, foreclosures hit a new record high of 2.2 million in December. Over 6.8 million mortgages are not current. This vast instability weakens the economy. Greenspan's statement that a 10 percent increase in home values is required seems very correct.

An increase in home values would stimulate the economy considerably. Homeowner confidence would increase and the availability of cheap loans, such as home equity loans, would make financing attractive. Home equity loans can be used to finance many things, including, home improvements, college tuition, large purchases, or debt consolidation. A 10 percent increase in home values would stimulate the economy by giving homeowners back a very important financing tool.

Home equity loans are often cheap loans, cheaper than most auto loans, student loans, or personal loans. Home equity loans are often based on the prime rate which is currently 3.25 percent. The prime rate has been stable since December of 2007, making home equity loans a low risk financing option.

Apply for home equity loans today.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.