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Experts Predict Economic Recovery Should Begin in the Second Half of the Year

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Experts Predict Economic Recovery Should Begin in the Second Half of the Year | MyKCM

One of the biggest questions we all seem to be asking these days is: When are we going to start to see an economic recovery? As the country begins to slowly reopen, moving forward in strategic phases, business activity will help bring our nation back to life. Many economists indicate a recovery should begin to happen in the second half of this year. Here’s a look at what some of the experts have to say.

Jerome Powell, Federal Reserve Chairman

“I think there’s a good chance that there’ll be positive growth in the third quarter. And I think it’s a reasonable expectation that there’ll be growth in the second half of the year…

So, in the long run, I would say the U.S. economy will recover. We’ll get back to the place we were in February; we’ll get to an even better place than that. I’m highly confident of that. And it won’t take that long to get there.”

Nonpartisan Analysis for the U.S Congress

“The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The labor market is projected to materially improve after the third quarter; hiring will rebound and job losses will drop significantly as the degree of social distancing diminishes.”

Neel Kashkari, President, Minneapolis Federal Reserve Bank

“I think we need to prepare for a more gradual recovery while we hope for that quicker rebound.”

We’re certainly not out of the woods yet, but clearly many experts anticipate we’ll see a recovery starting this year. It may be a bumpy ride for the next few months, but most agree that a turnaround will begin sooner rather than later.

During the planned shutdown, as the economic slowdown pressed pause on the nation, many potential buyers and sellers put their real estate plans on hold. That time coincided with the traditionally busy spring real estate season. As we look ahead at this economic recovery and we begin to emerge back into our communities over the coming weeks and months, perhaps it’s time to think about putting your real estate plans back into play.

Bottom Line

The experts note a turnaround is on the horizon, starting as early as later this year. If you paused your 2020 real estate plans, let’s connect today to determine how you can re-engage in the process as the country reopens and the economy begins a much-anticipated rebound.

Loan Programs For Lower Income Buyers

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http://data.bloggingrightalong.com/i/Real_Estate_Terms_The_Debt_to_Income_Ratio_and_How_It_Affects_Your_Home_Purchase.jpgOwning a home may be the American dream, but for many who are in a lower income bracket, finding a loan can become challenging. Thankfully, there are several loan programs that can work well for lower income people considering homeownership. Here’s a closer look at some of these home loans designed to help people who have a low-to-moderate income find a way to buy a home.

FHA Home Loans

FHA home loans are loans backed by the Federal Housing Administration. Lenders are more likely to lend to “higher risk” borrowers through the FHA loan program because the loans have the FHA’s backing.

With the FHA loan, a borrower can have a credit rating as low as 500, as long as there is a reasonable explanation for it, and a fairly high debt-to-income ratio. According to the U.S. Department of Housing and Urban Development, these loans require only a 3.5% down payment, which can come from gifts, and have less stringent requirements for credit rating or income.

USDA Rural Development Loans

If you are shopping for a home in a small town or suburban area, you may qualify for the USDA rural development loan program. Only those borrowers who make no more than 115% of the average median income in their area qualify for this loan program, according to the United States Department of Agriculture.

USDA loans require no down payment and the loan has no debt-to-income ratio maximum. It has a low PMI fee even for a zero-down loan, and fair interest rates. For those who live in areas that qualify, the USDA rural housing loan simply makes sense.

97% Loan-To-Value Purchase Loans

One of the biggest challenges for lower income borrowers to overcome is the down payment, but the 97% loan-to-value loan makes that less of a concern. This program, which Fannie Mae and Freddie Mac have offered to help encourage more people to get loans, allows people to buy a home with just 3% as a down payment.

The 97% loan-to-value purchase loan is specifically for first-time buyers. Borrowers must not have owned a home within the last three years to apply.

This loan program offers fair interest rates and does not have stringent credit score requirements. Borrowers can use gift funds to pay for the 3% down payment if necessary.

As you can see, there are many home loans designed for lower income borrowers. If you are looking to buy a home but worry you can’t afford it, consider one of these options.

How Will Coronavirus Impact Our Real Estate Economy?

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How Will Coronavirus Impact The Real Estate IndustryWithout a doubt, the COVID-19 (coronavirus) pandemic has impacted every part of the economy. This is a dangerous virus and has left many parts of the country on lockdown orders to prevent it from spreading rapidly. The question many people are asking is how much the real estate is going to be impacted by the virus as well.

People Are Not Looking For Houses

One of the biggest impacts of coronavirus is that some people simply aren’t out looking for houses. Stay at home orders and social distancing measures have prevented people from touring homes that they may be interested in buying and sellers postponing the listing of their home for sale.

In some parts of the country, the new listings available for homes have dropped drastically. This includes areas of the country that have been hit the hardest by the virus such as New York and California. Even web traffic to various real estate sites such as Zillow has dropped as well. Without a doubt, the rate of weekly mortgage applications has been impacted as well.

The Impact Of International Trade

In addition, for those who want to move, they might find a slowdown in international shipping and trade challenging. Many of the items that people need to furnish a home such as couches, tables, stoves, washers, dryers, ovens, and more are made overseas. Many home building materials are also manufactured and shipped from abroad. This creates a challenge for home builders and remodelers to effectively source the materials they need. It may take some time for the supply chain to reset and catch up with pent up demand.

The Response Of The Federal Government

Right now, those who currently own homes can find some relief from monthly mortgage payments if they are struggling financially. The government has put a moratorium in place on foreclosures. They have also told mortgage servicers to offer forebearance options for many mortgages.  While these grace measures will expire eventually, they may be helpful for the time being.

Looking Forward

The impact of COVID-19 on the nation’s real estate market is already apparent; however, the real question is how long the market is going to take to recover. The most recent report from National Association of Realtors states that 2020 is forecast for a 15% overall decline in the real estate industry. Many analysts believe that the real estate industry will be one of the fastest segments to recover across the country. Once the market does open up, the demand should increase quickly.  

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