Fewer Minnesota Foreclosures And Improving Home Sales Are Signs Of Improving Economy

Fewer Minnesota Foreclosures And Improving Home Sales Are Signs Of Improving Economy

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Minnesota foreclosures fell by 12 percent in 2009 but according to some real estate experts the real estate market is not improving. There were 23,019 foreclosures in Minnesota which represents 1.28 percent of all residential properties in the state. Since 2005 almost 5 percent of all residential properties have been foreclosed upon. Isanti county had the worst foreclosure rate with 388 or 2.86 percent of its homes were foreclosed. Counties with foreclosure rates higher than 2 percent were Sherburne, Mille Lacs, Wright, Kanabec and Chisago.

The federal tax credits and programs were the main factors in the improving real estate market conditions. The federal mortgage modification program prevented many potential foreclosures. Under this program mortgage payments can be cut by up to 30 percent of the owner's income. Although the mortgage modification program is scheduled to end in 2010, there is a good chance it will be extended. This program provides a cushion to mortgage holders.

The high rate of unemployment is a primary cause of increase rates of home foreclosure. As unemployment begins to trend down we will see a corresponding decrease in the number of foreclosures. There are indications that unemployment has now peaked and is beginning to trend downward. Programs to create jobs by the federal government will speed up the recovery process.

The tax credit for home buyers has also assisted in reducing foreclosure rates in 2009. This program provided a $8,000 tax credit for first time home buyers. This program also helped those who were behind in their mortgage payments by making it easier for them to sell their home before defaulting on their mortgage. Extension of this program would keep the market moving in this positive direction.

There are some hopeful signs. Congress is working on a federal jobs bill. Providing a tax credit to small business for hiring new employees would be helpful. The new jobs would have a multiplier effect that would ripple through local economies. The creation of community banks and the loosening of credit would stimulate real estate purchases and refinancing. Indications of congress providing for these type of measures brings a degree of optimism.

There are signs that the recession is ending. The unemployment rate seems to have peaked and is beginning to trend slowly down. If Washington extends the first time buyers tax credit, provides tax incentives for hiring, and loosens up lending to small business we can start making the welcome turn around.

Low housing prices will attract investors. Eventually they will bid housing prices up to revive the real estate market. As housing prices begin to turn around and credit becomes available the real estate market will begin to improve. The low housing prices will attract buyers. The market should begin to revive as the labor market improves and prices stabilize.

As we enter this final stage of the liquidity cycle we will see an improvement in the rate of Minnesota foreclosures. After this election cycle it will be easier for Congress to pass stimulus legislation and deficit spending that will boost the economy including the real estate market. We have good reasons to be optimistic.

About the Author:
When you need information that regards foreclosure in Minnesota, try using the Internet as your search. Many mn foreclosures can be helped if you find the right information. So, don't let you get a mn foreclosure happen to you without getting help.



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