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The fiscal cliff and real estate's future


The fiscal cliff could cause many lenders to implement stricter standards.

In recent months there has been a lot of discussion surrounding the impending "fiscal cliff," but what does this mean for the housing market and mortgage industry's future?

A number of experts agree that if lawmakers don't come to an agreement on the federal budget (known as the fiscal cliff) this could bring recent real estate and mortgage gains to a grinding halt.

"Of course, the fiscal cliff would affect the residential market because it affects consumer confidence," said Donna Evers, president and owner of Evers & Co, according to World Property Channel.

Additionally, the fiscal cliff could cause many lenders to implement stricter standards when determining the eligibility of prospective borrowers, which may make it more difficult for borrowers to qualify for mortgages.  

Although the fiscal cliff would have an impact on real estate activity, many experts claim it's a non-issue and legislators won't let it happen, regardless of party lines.

Current uncertainty among consumers has caused the rate of household formation to underperform. However, the deadline to come to an agreement over the federal budget is fast approaching and could curb any negative sentiment toward the real estate industry in the near future.

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