Federal Government Shutdown Survey

Transcription

1 Federal Government Shutdown Survey January 2019 National Association of REALTORS Research Group

2 Executive Summary Introduction As of midnight on December 21, 2018, the President and Congress were unable to come to an agreement regarding provisions of a Continuing Resolution to fund the federal government. Due to this, a partial federal government shutdown has occurred. This shutdown includes aspects of federal housing, mortgage, and programs of the real estate industry. Findings A survey of 2,211 members found 75 percent had no impact to their contract signings or closings. However, 11 percent did report an impact on current clients and 11 percent on potential clients. If respondents reported an impact on current or potential clients, they were asked further details. Respondents were allowed to pick more than one response, as they may be working with more than one client. The most common impact, at 25 percent, was the buyer decided not to buy due to general economic uncertainty, though they were not a federal government employee. Nine percent of these members had clients who decided not to buy, as their clients are federal government employees. Six percent had a seller who could not sell because their move was impacted by their employment. Three percent had a buyer who was unable to buy due to lender rejection based on furlough (Federal Government employee or contractor). Three percent had a buyer client who decided not to buy because of lost income or furlough (they are a Federal Government contractor). Among those impacted by the shutdown, 17 percent had a delay because of a USDA loan, 13 percent had a delay due to IRS income verification, nine percent had a delay due to FHA loans, six percent had a delay due to a VA loan, and nine percent did not cite the reason for the delay. Other members had lost bids on homes due to the shutdown. These members reported buyers had lost bids due to the following reasons: six percent said buyer was using a FHA loan, four percent buyer was using a USDA loan, and three percent buyer was using a VA loan. Impacted members also had contracts that were terminated due to the shutdown. Two percent had contracts terminated for each of the following reasons: buyer was using a VA loan, buyer was using a USDA loan, and other reasons not noted. One percent had contracts terminated because the buyer was using a VA loan. In past shutdowns, 59 percent of respondents were active in real estate and were not impacted. However 13 percent had delayed transactions and three percent had lost transactions.

3 Shutdown Impact on Transactions SHUTDOWN IMPACT ON TRANSACTIONS NO IMPACT ON CONTRACT SIGNINGS OR CLOSINGS 75% YES, IMPACT ON POTENTIAL CLIENTS 11% YES, IMPACT ON CURRENT CLIENTS 11% OTHER 8%

4 How Shutdown Has Impacted Transactions HOW THE SHUTDOWN HAS IMPACTED TRANSACTIONS BUYER DECIDED NOT TO BUY: GENERAL ECONOMIC UNCERTAINTY (NOT A FED'L GOV'T EMPLOYEE) 25% CLOSING DELAY DUE TO USDA LOAN CLOSING DELAY DUE TO IRS INCOME VERIFICATION CLOSING DELAY DUE TO FHA LOAN CLOSING WAS DELAYED (NO NOTED REASON) BUYER DECIDED NOT TO BUY: LOST INCOME OR FURLOUGH (THEY ARE A FED'L GOV'T EMPLOYEE) SELLER DECIDED NOT TO SELL: EMPLOYMENT WAS IMPACTED AND UNABLE TO MOVE CLOSING DELAY DUE TO VA LOAN BUYER LOST A BID BECAUSE THEY WERE USING FHA LOAN BUYER LOST A BID BECAUSE THEY WERE USING USDA LOAN BUYER LOST A BID BECAUSE THEY WERE USING VA LOAN BUYER UNABLE TO BUY: LENDER REJECTION BASED ON FURLOUGH (FED'L GOV'T EMPLOYEE/CONTRACTOR) BUYER DECIDED NOT TO BUY: LOST INCOME OR FURLOUGH (THEY ARE A FED'L GOV'T CONTRACTOR) CONTRACT WAS TERMINATED (BUYER WAS USING FHA LOAN) CONTRACT WAS TERMINATED (OTHER REASON) CONTRACT WAS TERMINATED (BUYER WAS USING USDA LOAN) CONTRACT WAS TERMINATED (BUYER WAS USING VA LOAN) 17% 1 9% 9% 9% 6% 6% 6% 4% 2% 2% 2% 1%

5 Past Federal Government Shutdown Impact PAST FEDERAL GOVERNMENT SHUTDOWN IMPACT WAS NOT IMPACTED IN THE PAST 59% HAD DELAYED TRANSACTIONS 1 HAD LOST TRANSACTIONS WAS NOT ACTIVE IN REAL ESTATE 2 OTHER 5% % 20% 40% 60% 80%

6 Methodology On January 7, 2019, NAR invited a random sample of 52,000 active REALTORS to fill out an online survey regarding the Federal Government Shutdown. A total of 2,211 useable responses were received for an overall response rate of 4.2 percent. At the 95 percent confidence level, the margin of error is plus-or-minus 2.09 percent. Additional Information For more information on What a Government Shutdown Means for REALTORS go to, National Association of REALTORS All Rights Reserved. May not be reprinted in whole or in part without permission of the National Association of REALTORS. For reprint information, contact data@realtors.org.

7 The National Association of REALTORS is America s largest trade association, representing more than 1.3 million members, including NAR s institutes, societies and councils, involved in all aspects of the real estate industry. NAR membership includes brokers, salespeople, property managers, appraisers, counselors and others engaged in both residential and commercial real estate. The term REALTOR is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS and subscribes to its strict Code of Ethics. Working for America s property owners, the National Association provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property. NATIONAL ASSOCIATION OF REALTORS RESEARCH GROUP The Mission of the NATIONAL ASSOCIATION OF REALTORS Research Group is to produce timely, data-driven market analysis and authoritative business intelligence to serve members, and inform consumers, policymakers and the media in a professional and accessible manner. To find out about other products from NAR s Research Group, visit nar.realtor/research-and-statistics NATIONAL ASSOCIATION OF REALTORS Research Group 500 New Jersey Avenue, NW Washington, DC data@realtors.org