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January 28, 2019
A new study from the nation’s leading real-estate agent advocacy group shows how the partial federal government shutdown is curbing economic activity.
The National Association of Realtors surveyed its members and found some were reporting an impact on current clients and another was reporting an impact on potential clients.
The study did find, that a majority of agents found no impact. Still there were a number of ways the government shutdown impacted the market.
Of those that reported an impact, 25% was when a buyer decided not to buy because of government uncertainty. That question specifically excluded federal government employees deciding not to buy.
The survey did find 9% of agents said they were impacted because a federal government employee opted not to buy.
But there are other factors at work as well: some, for instance, reported a closing delay due to a USDA loan, a small amount of report a delay due to IRS income verification and a closing delay due to a hang up for their FHA loan, all showing the outsized role the federal government plays in the housing market.
After primetime speeches Tuesday from the President, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, there was no movement toward ending the shutdown that started on Dec. 21.
Source: Realtor.com/Steve Goldstein
Mortgage applications returned to more normal levels during the week ended January 18 after two rather post-holiday periods. Both purchasing and refinancing were down from double digit levels and the Mortgage Bankers Association's (MBA) Market Composite Index gave back a small portion of the 37 percent in aggregate gains accumulated over the two previous weeks.
The composite, a measure of total application volume, declined 2.7 percent on a seasonally adjusted basis compared to the week ended January 11 and was down 0.3 percent on a non-adjusted basis. The Purchase Index dropped back by two points on an adjusted basis but did increase 4 percent on a non-adjusted basis and remained 13 percent ahead of the same week in 2018.
The Refinance Index declined by 5 percent and the share of applications that were for refinancing comprised 44.5 percent of the total. The share was 46.8 percent the previous week.
"Mortgage application activity cooled off last week after two consecutive weeks of sizeable increases. Both purchase and refinance applications saw declines but remained at healthy levels, with the purchase index remaining close to a nine-year high, and the refinance index hovering near its highest level since last spring," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Reversing the recent downward trend, borrowers saw increasing rates for most loan types last week, as better-than-expected unemployment claims, easing trade tensions and stabilization in the equity markets ultimately led to a rise in Treasury rates."
Source: JANN SWANSON