Housing Market Slowly Recovering After Shutdown

By: Carly Stephenson Email
By: Carly Stephenson Email

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HARRISONBURG, Va. (WHSV)-- The government shutdown cost the US economy $24 billion and the housing market is one area that has felt the effects.

People who applied for USDA guaranteed rural housing loans have had to wait to get approved.

People qualify for those loans based on income and where they plan to live.

Brandon Henry, owner of Monroe Mortgage Company, said USDA offices won't start processing loan applications until next week, "They're 17 days without being in a new home that they expected to be in within 30 days."

Henry said four or five loan applications are behind because of the shutdown.

"Typically it takes 30 days to close, but at this point we're at 45 days and you have to extend locks and it can cost the customer." said Henry.

Before a USDA loan can go through, the agency has to sign off on it.

Realtor Kai Degner said the delay won't help the housing market.

"Certainly disappointed that we had a shutdown right in the middle of the real estate recovery." said Degner.

This can be frustrating for some people.

"Well you could talk about the market in general and say it's not that big of a deal because we're going into the slower winter season, but for a family that's under contract to either buy or sell a home it's the most important thing in the world right now."said Degner.

Homes with "For Sale" signs could stay that way for an extra month or two according to Degner.

"Unfortunately, probably more often than not, if you're in a situation the answer will be 'hurry up and wait'" said Degner.

Furthermore, there's always the small chance that a contract could fall through because of the delay.

"If they're in a bind and need to sell it and have a back up contract, it can take precedent over your contract." said Henry.

Overall, economists believe that the full economic effect will take months to see, but some families are feeling it now.

"There is frustration, I think, from the shutdown in the real estate industry, just like businesses can't make decisions in an environment of uncertainty, families can't either." said Degner

USDA loans aren't excepted everywhere, but they are used in Rockingham County.

Henry admits that it's been slow, but she expects for it to pick up at the beginning of the month through November.

Conventional loans also had a delay, specifically for people who are self employed.

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