A housing recession, characterized by a decline in home prices and a slowdown in the real estate market, can have a profound impact on homeowners, potential buyers, and the overall economy. While recessions are inherently challenging, it is essential to recognize that the dynamics of each recession differ based on the root causes and economic conditions.
According National Association of Realtors (NAR) quarterly report for Q1 2023 reveals a decline of 4.2% in national median home prices compared to the previous year. Moreover, housing market analysis firms, renowned for their accurate assessments, have projected a further decrease in home prices over the coming months.
Recently Linda Peltz, eXp Realty realtor held discussion with Michelle Johnson from the Hero Loan Team to discuss a housing recession and why home prices going to drop. Get the expert insight in video below!
The Impact on Lending Company During Housing Recession
The housing recession affects not only homebuyers and sellers but also lending companies that play a crucial role in facilitating real estate transactions. During economic downturns, lending companies experience a shift in market dynamics and face several challenges.
Despite the challenges posed by a housing recession, lending companies can adopt proactive practices to support borrowers and maintain stability in the market. Such as, providing responsible lending to carefully evaluating borrowers financial capabilities, offering a range of loan programs tailored to meet the needs of borrowers during recession and Collaborating with government initiatives designed to stabilize the housing market during a recession.
More About Hero Loan Team
Michelle Johnson is currently the regional manager for Hero Loan team, a trusted loan and financing company in California. The company was named after the contributions of all unsung hero in the community, like doctor, teacher, military, policeman, etc.
Michelle believes that today’s lending practice have changed and bring solution to every housing market crisis. “It's important to note that lending practices have significantly changed since the housing crisis of 2008, offering better safeguards for homebuyers and sellers. Banks now assess your ability to handle the maximum possible payment based on your current income when evaluating adjustable rate mortgages. This ensures that you won't be approved for a mortgage that could potentially lead to default”
Further, various loan programs, including VA, FHA, and conventional loans, have different criteria and debt-to-income ratios. At the Hero Loan Team, they specialize in assisting heroes in the community. These individuals may even qualify for debt-to-income exceptions. However, they keeps on to evaluate each borrowers for their responsible lending, which is top priority to prevent another recession.
She added “When determining your eligibility for a mortgage, mortgage loan officers take into account factors like your income, debts, and debt-to-income ratio. It's important to consult with a loan specialist to understand your unique situation and explore the options available to you. Each case is unique, and there's no one-size-fits-all formula”
Waiting for next housing recession or assuming that interest rates will drop may not be the most effective strategy. Consulting with an expert loan officer, like Michelle Johnson is crucial which can provide accurate information and guide you on your path to homeownership.
Michelle Johnson
Hero Loan Team
Michelle@herolaoteam.com
559-314-6760
Linda Peltz, eXp Realty | DRE 01997670
559-353-4556
lwpproperty@gmail.com
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