Three cities set to lead housing market to recovery

New York is one of three cities that is on track to help lead the economy to a full recovery, as its housing market is getting stronger.

With housing showing consistent signs of positive growth, lenders should ensure that they have quality loan servicing software in place. That way, as Americans become more confident in their ability to be successful homeowners, a mortgage plan can be created that is suited to their financial needs.

The Washington Post reported that stronger home markets in three major U.S. cities – Atlanta, Chicago and New York – are even further proof that the economy is on the path toward a full recovery. According to the article, the relationship between renting a house and the prices to own one help dictate which markets are overvalued and which are undervalued.

Over long periods of time, the price to rent a home should rise at about the same rate as the price to buy one, reported the source. When the two diverge though – which can happen over shorter lengths – the market can fluctuate.

"When rents are rising faster than home prices, it is a sign that purchasing a home is becoming relatively more affordable, and so it will behoove people to seriously think about buying," the article explained. "That in turn should create upward pressure on prices in the future and to coax builders into the market."

In Atlanta, the metro area housing market saw a steep price drop during the housing bust, falling 16 percent from 2005 to 2009. Over the last three years prices have kept dropping, as equivalent rental ones have increased – which adds up to an improving market. New York and Chicago have had similar outcomes in the home industry.

Regardless of where individuals are looking to buy property, lenders will benefit from using an amortization schedule for loans. With well-priced monthly payments, both sides can be satisfied.