As we enter 2017, we find ourselves at the start of a new administration and, perhaps, a new way of doing business in Washington. While no one can predict exactly what the real estate industry can expect in the coming year, early policy shifts are already giving us a glimpse into the future.
The FHA Mortgage Insurance Reversal
One of the first significant moves that caught my attention occurred within the first few days of the new presidency. An executive order was signed that indefinitely suspended a planned 0.25% cut to the FHA Mortgage Insurance Premium (MIP).
This cut, which had been announced just a month earlier, would have saved the average first-time homebuyer approximately $446.00 per year.
The Signal vs. The Dollars
In the grand scheme of a mortgage, $446 a year may not seem like a deal-breaker. However, my concern isn't the specific dollar amount; it's the signal this sends.
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The Policy Direction: This move suggests that the federal government may be shifting away from the aggressive subsidization of first-time buyer costs.
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Economic Impact: From my perspective, supporting a healthy housing market is the basic foundation of a strong economy. Making it slightly more expensive for new buyers to enter the market is a trend we need to watch closely.
The 2017 Outlook: Wait and See
While this early move was a surprise, we must wait and see how the broader economic plan unfolds. Rising interest rates and shifting federal priorities mean that 2017 will be a year where having an expert, informed agent is more important than ever.
We are committed to monitoring these "Washington ripples" to ensure our Columbia County clients are never caught off guard.
