LOS ANGELES, Oct. 29, 2012 /PRNewswire-iReach/ -- According to a recent study, 25% of Americans are going to put off buying a home until they know who the next President is going to be.
So, if you're planning on getting rid of your existing home over the next couple of weeks -- don't. You may have to wait until November 7th to see any real results.
Anytime Republicans and Democrats duke it out during election season, the housing market slows down a little bit. After all, people don't like uncertainty swirling when they're about to make the biggest purchase of their lives!
In 2012, though, uncertainty is at an all-time high.
Right now, the U.S. is sitting on more than $15 trillion in debt. The average American has lost half of his net worth since the recession began. Only 16% of Americans say they feel confident that they can actually meet their retirement goals.
So, why does the White House have so much power over your ability to sell YOUR house?
- The next President will have to decide just how much federal involvement there's going to be in the housing market
Since the housing bubble burst, more than 90% of new home mortgages have come with some kind of federal guarantee. Even if they haven't come directly from Fannie Mae and Freddie Mac, they have come in the form of FHA loans -- or, loans that are given out by private banks, but insured by the federal government. So, if the homeowner defaults on the loan, the federal government picks up the tab and pays the bank back. Since so many banks have been terrified to lend out money over the past few years, this has been the only way to get them lending again.
- The next President will determine the future of refinancing
There are a number of rules (including rules related to refinancing) included in the Dodd-Frank Act. If President Obama is re-elected, the Act will stay in place. However, if Mitt Romney is elected, he has already said he will repeal the Act and replace it with something else.
Romney says his plan would focus less on regulations, so that banks have an easier time lending money. According to Romney, all of the regulations in the Dodd-Frank Act place too much of a burden on small and local banks -- thus, making it difficult (if not impossible) for them to help their borrowers refinance (or to give out new home loans altogether).
- The next President could determine the future of short sales
If the Bush-era tax cuts are allowed to expire at the end of 2012 (like they're scheduled to do), it could put an end to the wave of short sales that we have seen since the recession began in 2008. If short sales are no longer a viable option, it means that homeowners won't have a safety net for staving off foreclosure -- and that's a risk that some people may not want to take, especially with the nation's unemployment rate still hovering around 8%. Without the option of a short sale, all it would take is one layoff to send a homeowner in to a financial black hole.
And, remember, the Fed has already said that it plans on keeping mortgage rates low until 2015. So, buyers know they still have more time to take advantage of those record-low rates. There is no "ticking time bomb" going off for buyers right now. If they decide to wait a few weeks, months, or even a year, they know there will still be low asking prices and low mortgage rates waiting for them.
Media Contact: Daniel Torelli RealtyPin, 514-836-1432, firstname.lastname@example.org
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