Buying a Home after the Presidential Election
It doesn’t matter where you fall in the political spectrum, how you voted in the presidential election, or whether the results made you happy or not. What matters is how it might impact you personally. And because the inauguration has not occurred at the time of this writing, we are only left to speculate how it will affect the ability of Americans to buy a home. If your 2017 includes buying a home, there are some economic possibilities you should be aware of and how to develop a home buying plan to deal with them.
Possibility One: Lenders will Loosen Restrictions
In the post-2008 meltdown, banks were required to take stress tests to prove they could withstand another event. The regulations currently in place have helped the mortgage markets recover but at the same time, excluded many people who may not have recovered as quickly. While banks were given help, the average person was not.
The restrictions put in place put a premium on creditworthiness. Good credit takes a great deal ofwork to achieve and some careful vigilance once you do. The benefits are many. Good credit opens numerous doors that include better rates on loans, lower premiums on insurance, and increasingly, the kind of job you might get. If restrictions are loosened, lower credit scores will be eligible for loans that may not have otherwise been available.
Possibility Two: More Buyers will Enter the Marketplace
With lower standards, many buyers who were once prohibited from certain types of loans may now find lenders will to talk to them. This may result in creative financing for borrowers who may not be as qualified. This may allow numerous buyers who were negatively impacted by the housing crisis to enter the market.
Possibility Three: The Marketplace will Respond with Increasingly Higher Prices
Many economists are concerned that lower restrictions will draw numerous new home buyers into a market that may not have inventory available. Numerous home buyers chasing a limited number of homes will push the prices of those homes higher. While this might make sellers smile, an imbalance such as this will not be beneficial for either side of coin. Sellers would be able to get the higher inflated price for their property but numerous sellers will become home buyers as a result of the transaction and face buying a home in a hyper-priced market, eating much of the perceived profit from the sale they just made. Higher prices will also exclude many entry-level buyers or severely restrict their choices. Those same higher prices might be seen as an increased risk, so lenders, although allowed to lend to riskier applicants may assign much less palpable terms to those agreement.
Once again, this is only speculation and because this post will appear in December will not play itself out until winter retreats into spring, this is only an educated guess. In my opinion, the winter months should have you (buyer and/or seller) focusing your efforts on your credit before those possibilities become reality.
How can we assist you today?
On behalf of The Jones Group @ Sunriver Realty
Nola Horton-Jones, Principal Broker/Realtor | ABR, C-RIS, e-PRO, GREEN, RSPS, CCIM Candidate
Bryce Jones, Principal Broker/Realtor | ABR, CRS, e-PRO, GREEN, GRI, RSPS, SFR
The Jones Group @ Sunriver Realty | 57057 Beaver Drive | Sunriver, OR 97707
N Mobile: 541-420- 3725 | B Mobile: 541-420- 4018 | Fax: 541-593- 5123
Licensed in Oregon