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Consumers Have Final Say on Home Foreclosures and Recession Problems

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By : John Cutts    99 or more times read
How quickly the U.S. will recover from the impact of the recession and the huge number of home foreclosures will depend on how brave consumers will be, given the condition of the housing market and the economy. According to experts, consumer confidence will decide how far the recovery will go in the next few years.

Economists stated that even for those who have the means and the desire to purchase a home, buying one right now seemed unwise. They stated that even with the presence of low-priced repo homes, majority of potential homebuyers are staying out of homeownership, mainly because of unemployment fears. For most of them, not being sure whether they will still have a job a few months from now is a major concern.

Economists did admit that consumer confidence is definitely better now than in the past three years or so. However, this growing confidence to spend is tampered by caution, with most consumers considering every purchase, particularly when it comes to residential properties, even if the properties involved are very affordable bank owned foreclosures.

Experts stated that consumer confidence and the willingness of people to buy plays a highly important role on whether the country will be able to mount a sustained recovery from the effects of the economic downturn and the massive oversupply of home foreclosures. The U.S. economy, experts have revealed, is around 70% dependent on consumer spending for its gross domestic product (GDP). They stated that what matters right now is what households are planning to do with their income.

They actually have three choices; to save, to pay their debts or to spend it on consumer goods or homes. Economists revealed that the decision that will benefit the economy right now is the third option spend. Even purchases of cheap fixer uppers will add to the GDP of the country, they further asserted.

Although more Americans are reportedly hitting the stores to do some buying and shopping in the past couple of months, analysts stated that majority are making only practical purchases and most are saving a percentage of their income. They stated that the consumer sector is currently characterized by caution, with the recession and the issue of home foreclosures still fresh in the minds of majority of buyers.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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