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Housing slump finally hits rock bottom

After the boom in the housing market seeped away and turned into a decline, many homeowners were worried that all their hard earned savings that they put into their dream home as prices were still rising healthily were going to bite the dust big time. As with any bust, owners were watching the declining figures of the market nervously and anxiously, afraid that the latest bubble burst would prove to be a bottomless pit.

The latest figures on the market however suggest that finally, the economic downturn in the housing market could be phasing out. Although housing starts are at their lowest level in six years and building levels at their lowest level in nine years, the mortgage rates have also fallen further making housing more affordable again. The Federal Reserve as well has decided not to change its key lending rate, leaving the average rate on a 30-year mortgage at 6.12 percent.

Nevertheless the construction industry is still feeling the bite of the slump in the housing market. 29,000 jobs were lost in November, a small rise to the job loss in the construction industry of the previous month. Consumer spending again was also negatively affected as homeowners feel they have less money to spend. All in total though, as mortgages are lowering and builder confidence is rising, economists are suggesting that in 2007 the housing market could begin to slowly pick up again.