I’ve been hearing some concerns lately about the government shut down and how it will influence our mortgage loans.  The truth is, it hasn’t had any effect (yet).  Many of the government employees influenced are people that work in the parks departments, and other “non-essential” federally funded positions.

Conventional Loans

Conventional loans are not funded or backed by any government agency.  Therefore, they are not directly influenced.  Since Conventional mortgages dominate the market, the shutdown hasn’t changed them.

FHA / VA / USDA Loans

Because FHA / VA and USDA loans are backed by the federal government you would think they would stop as well.  But historically government shutdowns have not stopped the production of these loans, they are a crucial part of the U.S economy and would have a significant effect of our growth.

What is Affected?

The government shutdown is not without some influence on the mortgage market.  All mortgages require 4506T tax transcripts to be ordered, and this is done through the government entity (IRS).  We have not seen this be a problem in the past, nor currently.  The biggest thing we are seeing is in consumer confidence, when we have a large economic development like this, many well paid governments employees have their pay suspended.  This causes turmoil and discomfort because more than a quarter million employees are working without pay right now, and that is approximately 1.4 billion is lost revenue per week.  Markets that are heavily dominated by government jobs are seeing a slow in real estate purchase.

What Could This Do to The Real Estate Market?

With large markets like Reno Nevada slowing it will have a national consequence on real estate prices and statistics.  We will likely see a downward slide in real estate prices over the next month, which will bring the national average lower.

 

Thank you for reading, I hope this has been informative.  If you would like to know more about the market and possibly apply for your own home, you can Contact me here.

 

 

 

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 Justin Scott

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Executive Mortgage

NMLS 271650

909 . E Walnut Street

Green Bay WI 54301