Last-minute fiscal cliff agreement could spur additional mortgage activity
Posted on Tuesday, January 22, 2013 at 2:10:38 PM
The national housing market and economy are closely tied together. Rising property values and home sales have contributed to the economy's success, despite the impending "fiscal cliff," the Los Angeles Times reports. As both sectors build momentum, this could result in additional residential lending in the near future.
However, many real estate experts feared if lawmakers failed to come to an agreement, it would be devastating to the housing market and mortgage industry.
"Housing market activity would likely be negatively affected if approaching fiscal cliff is not resolved," said Home Loan Investment Bank vice president Patrick Deady. "Overall consumer confidence and reduction in federal benefits as well as increased taxes hang in the balance. These issues left unresolved or resolved inadequately will have problematic implications for the housing market. Our fledgling housing recovery requires a stable and steady hand to continue. Any miscalculation on a resolution to the fiscal cliff could result in reduced demand which could stall our recovery."
Luckily, legislators came to an eleventh hour agreement on certain spending cuts and tax deductions. As a result, prospective borrowers could continue to take advantage of record-low mortgage rates to make the transition to homeownership and refinance in the coming months.