What is the government shutdown's impact on real estate? What happens from today onward?National Association of Home Builders Chief Economist David Crowe said, "Spike in mortgage interest rates, along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation's debt limit, have caused builders and consumers to take pause". He added, “However, interest rates remain near historic lows and we don’t expect the level of rates to have a major impact on sales and starts going forward. Once this government impasse is resolved we expect builder and consumer optimism will bounce back.” (Source: www.realtor.org)According to realtor.com, Crowe's view seems to be the same as other industry observers.The main impact of the government shutdown in the real estate industry was the difficulty in obtaining IRS 4506T (copy of tax returns) documents needed to close most borrowers' loans.Only USDA (United States Department of Agriculture) and Jumbo loans were greatly affected by the shutdown. USDA loans were completely inaccessible to borrowers. Jumbo loans, on the other hand, were requiring documentation from IRS. But this should be back to normal within the next few weeks.Many lenders remained operational through the shutdown and still processing FHA loans. There might be a slight backlog of approvals on the FHA's end, but there shouldn't be any significant delays."Best advice is to buy a home at the current lower prices and historically low rates. Rates will rise and property values will follow due to limited supply" advised Cal Haupt, Chief Executive Officer at Georgia-based Southeast Mortgage.Government shutdown is the topic of the decade. Nobody really knows what will happen in the future. Let's just keep our fingers crossed and hope for the best!
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