“There are many struggles homeowners and potential buyers are navigating,” Black told Mortgage Professional America. “The biggest theme I see right now is where to go to escape the volatility and unknown outcomes of global economic conditions. These are at the forefront of any large decision.”
Buyers hesitating to move forward with mortgage purchases has a trickle-down effect on the local economy. According to Black, it hurts brokers, appraisers, inspectors, and other workers involved in a home purchase.
“People are either holding off or remaining in a current lifestyle situation that is not optimal,” Black said. “It is putting strain on the local customer confidence and hurting local small businesses who count on the support of spending.”
The falling knife effect
By buyers sitting on the sidelines, it could impact not only their livelihood but also the local economy and the financial security of mortgage brokers. Black said there are three effects to homebuyers putting off purchasing a new home and cutting back on discretionary spending.
“It will be less income for self-employed borrowers who are normally high-wage earners in their neighborhoods,” Black said. “Plus, less consumption means less tax revenue for cities and counties to make good investments in schools, infrastructure, jobs, and community housing. Finally, less activity means less revenue for professionals in the housing, or affiliates to the housing market, which are large spenders.”