Michael GarciaMortgage Banker NMLS#: 1419198
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As we enter the summer months and work through the challenges associated with the current health crisis, many are wondering what impact the economic slowdown will have on home prices. Looking at the big picture, supply and demand will give us the clearest idea of what’s to come. Making our way through the month of June and entering the second half of the year, we face an undersupply of homes on the market. Keep in mind, this undersupply is going to vary by location and by price point. According to the National Association of Realtors (NAR), across the country, we currently have a 4.1 months supply of homes on the market. Historically, 6 months of supply is considered a balanced market. Anything over 6 months is a buyer’s market, meaning prices will depreciate. Anything below 6 months is a seller’s market, where prices appreciate. The graph below shows inventory across the country since 2010 in months supply of homes for sale. Robert Dietz, Chief Economist for the National Home Builders Association (NAHB) says : “As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt. Estimates vary, but based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.” Given the undersupply of homes on the market today, there is upward pressure on prices. Looking at simple economics, when there is less of an item for sale and the demand is high, consumers are willing to pay more for that item. The undersupply is also prompting bidding wars, which ...
The pandemic has convinced many urban-dwellers that it’s finally time to give up on living in the city. Renters and owners alike are feeling cooped-up and uncertain about the future. As a response, many are making plans to leave the city and not just for short-term stays in weekend houses, as was seen when the pandemic first occurred, but for more permanent housing in the suburbs. While some of the recent moves have been a product of accelerated plans that had been living on the back burner, others may have acquired a taste for suburban (or even rural) living while sheltering with their parents in spread-out neighborhoods or log cabins. And even after decades of apartment living, those that have called the city their home are seriously considering trading their small rental for their own white picket fence. A Rise in Desire for Suburban Living The Harris Poll recently surveyed 2,000 Americans to determine if the COVID-19 crisis had sparked a desire for people to move. Of those currently living in urban areas, 39% indicated that the pandemic had caused them to consider moving to a less densely populated area. According to FlatRate Moving, between March 15 and April 28, there was a 74% increase of moves from New York to Connecticut, 38% increase of moves from New York to New Jersey, and a 48% jump of moves from New York to Long Island compared to the same period last year. And while some are renting temporarily to try and escape the worst of the pandemic, a considerable number of those renters are converting to buyers. However, others are transplanting with the immediate intention to buy. Unsure of whether or not ...
One of the more recognizable side effects of the COVID-19 pandemic is the dramatic increase in the number of people working from home. The shift to remote work has caused many of us to look at our current homes in a whole new light. And whether you’re logging hours from your couch or still searching for a Zoom-appropriate workspace, it’s not uncommon to be looking for a home office upgrade. Our “New” Normal: The Realities of Working From Home Global Workplace Analytics conducted an online survey between March 30 and April 24, 2020 asking over 2,600 global employees on their feelings towards working at home. Of those surveyed, over 77% of the workforce recorded that they would like to continue working from home at least weekly once the pandemic has ended. Some employers are embracing the reality of their employee’s responses. Steve Ozonian, CEO of Williston Financial Group, believes that the remote workforce will have a dramatic impact on our ‘new normal’. Citing that the shift to remote work will, “make it less stressful for people because the commute is one of the worst parts of working and we are going to have cleaner air because of it”, Ozonian also predicts that the need for commercial office space and the average commute is going to plummet. When speculating on the future of remote work, Ozonian went on to state, “I believe it will be 50% -- that's probably the average amount that will stay at home because it is working so well. You are going to have happier employees and as long as they are productive and the quality of the work product is as good or ...
With consumers severely impacted by the coronavirus pandemic, individuals now can examine their credit report more frequently than just once per year. The three primary US national credit reporting agencies, Equifax , Experian and TransUnion , agreed that they will offer free weekly credit reports to Americans for the year to help consumers protect their financial profile during the COVID-19 crisis. The free reports can be obtained from AnnualCreditReport.com . Since consumer credit reports monitor credit activity and payment history used by lenders, creditors, service providers and other businesses to extend credit this will allow consumers to better understand the impact of the crisis on their future financial needs. Consumers are encouraged to review their credit reports frequently to understand the information that is being reported about their payment history. The three credit reporting agencies also have worked with their U.S. trade association, Consumer Data Industry Association, to provide guidance to data furnishers on how to support consumer credit reporting during the pandemic.
There are many self-employed individuals that earn a good living. But without a regular paycheck, these workers might have a harder time proving their income than those who receive a traditional W-2. While this makes it more difficult to obtain a mortgage, it is possible to purchase a home if you’re self-employed. As the U.S. has seen mortgage rates falling back to recent lows, many people are looking into refinancing or purchasing a home during the COVID-19 crisis. However, both of these loans have become difficult to obtain due to recent impacts on unemployment rates and the economy. Recent Changes in Guidelines for Self-Employed Borrowers For self-employed applicants, lenders have traditionally looked to verify a self-employed borrowers’ business, income, and assets within 120 days. And while a typical crisis would see an extension of that timeframe to 180 days, vendors now only have just 10 days to verify income and assets during the COVID-19 pandemic. Because of the recent changes, obtaining a mortgage can be even more challenging for self-employed workers as lenders consider the overall stability and viability of both your business and your income. Lenders will often consider the overall demand for your business, its location, financial strength, and whether or not it’s capable of continuing to provide you with enough of a stable income to support a mortgage. In response to COVID-19, many lenders have been making adjustments to their credit criteria with the goal of better accounting for the increased likelihood of forbearance and defaults. According to a survey conducted by the Mortgage Bankers Association in ...