What Happens To Real Estate If The Government Shuts Down in February?
The senate and house have reopened the Government with a bill that has put thousands of government employees back to work, pending an agreement this funding only lasts until 2/15/19. At which time a bill on President Trumps desk will need to be signed, establishing a longer term agreement.
January 22nd, 2019 I put together an article titled: How The Government Shutdown Helps Home Buyers. It described the deflated market we experienced during the longest hiatus our U.S representatives have ever taken. With over 800,000 employees out of work with no pay, including the IRS (a large part of the real estate / mortgage industry) we saw immense stagnation in real estate prices as buyers were slowed and unable to buy due to their job security, not to mention the lack of confidence the rest of America was feeling.
Another Shutdown Could Be Your Chance To Buy
If you read the previous article it talked about home prices falling, which is the ideal time for home buyers who have been waiting so long for “the right deal”. If this happens the smart home buyers will capitalize on the down market and put their offers in while it’s good. We already see a down market in the winter, usually you can attain good deals during this time; but combined with a lack of consumer confidence in the Government and we could see a perfect storm for low real estate prices.
The Shutdown Could Influence Mortgage Rates As Well
If this “perfect storm” occurs, real estate prices fall and mortgage rates fall at the same time it could spur an increase in home sales. Which would create a short lived inflation in purchase business and refinances. We have already seen lenders becoming far more competitive in this 2019 market, the question is how far they will drop their rates to remain this way.
The Short and Long Term Effect
This is theoretical of course, but we know the short term effect of these shutdowns will potentially drop real estate prices and mortgage rates, causing an influx in production. This will be a very short lived “bubble” where people will see very good deals and rates. But in markets that have a depleted inventory could see that small amount of inventory eaten up very quickly; leaving the market with even less. As rates and real estate prices increase after this bubble we could see a stagnation in the market that would slow business, further adjusting real estate prices and mortgage rates.
What Can I Do Now?
You can Sign up for mortgage rates here
Read the About me section and learn more about how I conduct business
reviews are a great way to see who you are dealing with
if all that checks out you can apply here
Justin Scott
Loan Officer
NMLS 878581
- C) 920-530-4484
- O) 920-490-8823
- F) 920-490-8967
Executive Mortgage
NMLS 271650
909 . E Walnut Street
Green Bay WI 54301