The government’s partial shut down this past month doesn’t seem directly related to the Real Estate market. But like many other areas of finance in the country, the effects of the shut down are trickling through in ways many Realtors expected but hoped to avoid.
The most affected area of Real Estate? Loans. “Most lenders rely on IRS transcripts regularly to qualify buyers for their loans,” Sarah Burbage of Movement Mortgage told us. “If they cannot summon a transcript, loan applications are delayed. That's why you need lenders like Movement who can often find other ways of qualifying buyers. A lot of lenders can't do that and so right now, buyers are stuck." The IRS began releasing transcripts again on January 8, but the transcript requests are severely backlogged and still causing notable delays.
Ever heard of a USDA loan? This type of home purchasing loans applies to those buying homes or properties in rural areas. These loans apply to way more than just farmers and thousands of people rely on the Department of Agriculture every year to supply these loans to make home-ownership possible. But with the DoA shut down, 17% of buyers have missed the opportunity to close and get those keys in the past month.
Home equity and new loans through the Federal Housing Administration are on hold due to short staffing, which is responsible for plenty of closing dates pushing back. This is especially difficult around the first of the year. A closing set for the end of December that gets pushed back until January means the buyer cannot claim Homestead Exemption (which will potentially cost them thousands of dollars). The Department of Veterans Affairs is also maintaining their loan program but is struggling to keep up with applications, again delaying closings.
A whopping 25% of missed this past month’s closing dates, as reported by Realtors, are due to buyers feeling uncertain about our economy. A house is typically the largest investment anyone ever makes. A government shut down does evoke a feeling of confidence when it comes to makes such an investment!
While the National Realtor Association does not predict the housing market to be greatly affected long-term, other factors including mortgage rates and low inventory could altogether contribute to a difficult marketing in 2019. If you’re ready to buy or sell, it’s imperative you find a single agent Realtor who is well-versed in how these issues will affect your process. Ask questions! Find out what your Realtor knows and doesn’t know and keep interviewing until you find one that’s armed with information to keep you safe.
Of course, Round Table Realty agents are educated weekly on the economy and other factors that affect our clients. Give Round Table Realty a call and learn for yourself how they can serve you.