Mainstream Concerns about an Economic Slowdown Revisited

Recently, we reported that many believe a recession could happen within the next two years. We explained that 70% of economists and market analysts surveyed last year believe that a recession will occur in 2019 or 2020 and that 42% of consumers currently looking to purchase a home also agree that a recession will occur this year or next.

However, the U.S. economy has performed well in the first quarter of 2019 and that has caused some experts to change their thinking on an impending economic slowdown.

Here are a few notable examples:

Anthony Chan, Chief Economist at JPMorgan Chase

“I feel really comfortable that the economy is slowing down this year, but not going into a recession… It doesn’t look, to me, like the odds of a recession in 2020 are there.”

Dean Baker, Senior Economist at the Center for Economic & Policy Research

 “To sum up the general picture, the U.S. economy is definitely weakening… However, with wages growing at a respectable pace, and job growth remaining healthy, we should see enough consumption demand to keep the economy moving forward. That means slower growth, but no recession.”

Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley

“I’m not convinced a recession is coming soon… I see an improving housing market (low rates help), a rebound in bank lending, a tight labor market, higher oil prices and well-behaved credit markets. All these point to a stable U.S. economic outlook.”

Bottom Line

We are seeing a stronger economy than many had predicted. That has caused some experts to push off the possibility of a recession further into the horizon.

The Cost of Renting vs. Buying This Spring [INFOGRAPHIC]

Some Highlights:

• Historically, the choice between renting or buying a home has been a tough decision.
• Looking at the percentage of income needed to rent a median-priced home today (27.7%) vs. the percentage needed to buy a median-priced home (17.5%), the choice becomes obvious.
• Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

Existing Home Sales Slow to Start Spring [INFOGRAPHIC]

Some Highlights:

• Existing Home Sales slowed to an annual pace of 5.21 million home sales in March.
• Low inventory levels are still impacting home sales! The current month’s supply of homes for sale is 3.9-months.
• Median home prices were up 3.8% over last March at $259,400. This marked the 85thconsecutive month with year-over-year price gains.

5 Reasons Why Millennials Buy a Home [INFOGRAPHIC]

To Search the hottest properties for sale right now in San Diego County visit www.TheEliasTeam.com

Slaying the Largest Homebuying Myths Today [INFOGRAPHIC]

Some Highlights:

• The average down payment for first-time homebuyers is only 6%!
• Mortgage interest rates have been on the decline since November! Hop in now to lock in a low rate!
• 88% of property managers raised their rents in the last 12 months!
• The average credit score on approved loans continues to fall across many loan types!

Your Home’s Spring Maintenance Checklist [INFOGRAPHIC]

Some Highlights:

• Every spring, your home needs some extra TLC!
• Whether you plan on selling your home this spring or not, conducting this maintenance will help ensure your home functions well for the rest of the year.
• Your real estate agent will have a list of specific suggestions for getting your house ready for market and is a great resource for finding local contractors who can help!

7 Things To Avoid After Applying for a Mortgage!

Congratulations! You’ve found a home to buy and have applied for a mortgage! You are undoubtedly excited about the opportunity to decorate your new home! But before you make any big purchases, move any money around, or make any big-time life changes, consult your loan officer. They will be able to tell you how your decision will impact your home loan.

Below is a list of 7 Things You Shouldn’t Do After Applying for a Mortgage! Some may seem obvious, but some may not!

1. Don’t change jobs or the way you are paid at your job! Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.

2. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

3. Don’t make any large purchases like a new car or new furniture for your new home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher debt to income ratios… higher ratios make for riskier loans… and sometimes qualified borrowers no longer qualify.

4. Don’t co-sign other loans for anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payment against you.

5. Don’t change bank accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer money between accounts, talk to your loan officer.

6. Don’t apply for new credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

7. Don’t close any credit accounts. Many clients have erroneously believed that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both those determinants of your score.

Bottom Line

Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.