Headlines Happen: What Do They Mean To You?
Ten years after the events often referred to as the “housing crash” and “mortgage meltdown” that coincided with the Great Recession, real estate and mortgage have remained fixtures in the mainstream news due to the massive impact felt by consumers nationwide. The majority of adult consumers today lived through the housing crisis either as homeowners who struggled, held tight or lost a home – or as young people who observed their parents’ experiences. Still known as a major part of the “American dream,” homeownership has long been a centerpiece of U.S. consumers’ personal finances, which is why the housing and finance markets will likely be of ongoing interest to the media and the public alike. It’s important to understand that reporters and media outlets produce stories without basic industry knowledge to calibrate their interpretation of random stats and often present data without insight. Doing so is not necessarily calculated or with malicious intent; however, what may sound like bad news may in fact present opportunities for some consumers – depending on their personal circumstances.
Lending and real estate professionals have become important resources that consumers should tap into regularly. They can help you look for opportunities – or warning signs. Here’s what you should do on an annual basis with the help of a qualified loan officer and agent:
Homeowners
- Monitor your home’s value
- Review the rate and terms of your mortgage
- Discuss your goals for the next 1, 3, 5 and 10 years: Moving up, downsizing, vacation or second home, investing
Renters
- Monitor, build and improve your credit score
- Save as much as you can
- Learn about all the down payment and loan options – low down, assistance, different programs
The housing market has slowed along with price growth throughout 2018. Though mortgage interest rates have increased and reduced the amount of refinance activity, rates are still low in historical context. Lawrence Yun, Chief Economist for the National Association of Realtors provides a deeper perspective on the state of housing and what’s to come in 2019. Speaking at the 2018 Realtors® Conference & Expo, Mr. Yun acknowledged weakness in the new construction sector, saying, “All indications are that we have a housing shortage. If you look at population growth and job growth, it is clear that we are not producing enough houses.” He went on to define the U.S. economy as “good” with record low unemployment and increasing wages, noting, “This type of activity in the economy should support the housing market, even as interest rates rise.”
There are a lot of headlines that sound sinister. But if you’re worried about another housing crisis like that of the last decade, Mr. Yun says, “…people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.”
Sources: National Association of Realtors® (NAR)