Rising home prices could improve financial situations of consumers

During the financial crisis, many homeowners saw the value of their properties slashed, which impacted how they spend their money. 

However, in the past year or so, home prices have made a major rebound that continued into the first quarter of 2013. As homeowners regain equity in their homes, their financial situations could improve, which may increase their everyday spending.

With that said, small- to medium-sized businesses could see additional business in the near future, potentially leading them to have the need to replenish their inventory. While companies this size can struggle to obtain a loan from a bank for this purpose, inventory financing remains an option. 

Home values continued to rise in the first quarter of the year
As the housing market kept its positive momentum, home values increased to begin 2013. The Zillow Home Value Index rose to $157,600 in the first three months of the year, a 5.1 percent year-over-year improvement

Meanwhile, the Zillow Home Value Forecast Projects annual home value appreciation will be around 3 percent, with national home prices jumping by 3.2 percent through March 2014. 

"The national housing market has rebounded strongly over the past year," said Stan Humphries, chief economist at Zillow. "But the sometimes dramatic home value run-ups experienced during these months were never expected to be sustainable, and recent slowdowns are indicative of a market that is slowly finding its natural level."

Certain markets saw extreme home value appreciation in the first quarter, and as a result, consumers in these areas could have additional funds for everyday purchases. For example, values in Phoenix jumped 24 percent on an annual basis, while Las Vegas, San Jose, San Francisco and Sacramento all had gains greater than 20 percent. 

Rising home prices leading to better personal financial situations for consumers would be a welcome sign to retailers that saw a 0.4 percent drop in sales in March, according to the U.S. Commerce Department.

Small- to medium-sized retailers needing to keep shelves stocked can use inventory financing
If sales pick up, retailers might need to replenish inventory. However, small- to medium-sized businesses can often struggle to obtain a loan from a bank to do so, as available capital can be limited. 

In situations such as these, businesses can turn to inventory financing. This type of asset-based lending allows a company to use current product as collateral to obtain a revolving line of credit, which can provide them with the funds needed to keep shelves stocked.