It's The Unemployment, Stupid! Why Buyers Remain Uncertain Even With Incredible Housing Prices and Great Mortgage Rates (Sorry, I don't usually say "Stupid")
There are a lot of qualified home buyers, but most are on the fence due to the reason explained in this article. More government intervention = Less consumer confidence
Many experts are trying to put their finger on why buyers are not flocking to the great housing buys they can find right now coupled with historically low mortgae interest rates. Dr. Mark Dotzour doesn't say it exactly like this - but the message he brings is clear to me ... "IT'S THE UNEMPLOYMENT, STUPID." (And I usually don't say "Stupid"!)
Dr. Mark Dotzour is Chief Economist for the Texas Real Estate Center and has for years noted unemployment as one of the "most destructive factors in housing..." However, in my humble opinion, it is not simply the unemployment numbers although that is a powerful influencer. It is also coupled with the UNCERTAINTY of CURRENT employment!
I hear it every day from clients, friends and family - those who are currently EMPLOYED. Yes, I did say EMPLOYED. They are "uncertain" they will REMAIN employed - or at least concerned they will remain employed at the same salary and in the same city. Employers are not only not hiring - many are cutting back on current employees.Several of my current clients responded to my letter advising them of lower rates and the opportunity to lower the term of their mortgage from a 30 year to a 15 year which would save them tens of thousands of dollars. More than one has responded "....I am fearful that I will lose my job and be unable to pay the slightly higher 15 year mortgage payment.....". One of my clients works for the postal system and even though she is a 15 year employee, with all the postal employee cut-backs, she fears losing her position or forced to move to another state which would force her to sell her current home.
Without certainty with employers, there is no certainty for employees! Without certainty of employment with employees - there is no certainty in housing!
“When business owners are unsure about their future, what do they do? Nothing,” said Dr. Dotzour. “They just try to survive until the storm is over.”And I would just add here that when business owners are unsure about THEIR future, their employees are uncertain as well! You may agree or disagree with his reasons, but I wanted to share the top seven reasons business owners aren’t hiring, according to Dr. Dotzour:
- Complete uncertainty regarding the future cost of health care for business owners
- Two thousand pages of bank regulation that has yet to be enacted
- Regulation of health care and health insurance
- Regulation of off-shore oil drilling
- Regulation of oil-shale deposits
- Complete uncertainty about future income tax rates
- Complete uncertainty about future capital gains tax rates
“.......Our economy is not going to recover until businessmen and women regain confidence in the future opportunities in our country,” Dr. Dotzour said.
So.....AGREE? or DISAGREE?
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Louise G. Thaxton NMLS #69996, VA Home Loan Expert
#6 in Nation for VA Loans
Fairway Independent Mortgage Corp NMLS #2289
Phone: 866-960-9115 Email: lgthaxton@fairwaymc.com
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