All Eyes On Washington: What Will the Next Stimulus Bill Do for CRE?

Mortgage Bankers Association President & CEO Bob Broeksmit, CMB, joined Walker & Dunlop Chairman and CEO Willy Walker on July 29 to discuss the stimulus bill being crafted in Washington, D.C. and its impact on the multifamily, mortgage and commercial real estate industries.

National Multifamily Housing Council President Doug Bibby and Real Estate Roundtable President & CEO Jeff DeBoer also participated in the latest ‘Walker Webcast’ to discuss the next $1 trillion-plus stimulus plan.

“Given the distance between the left and the right in Washington today, it should come as no surprise to any of us that the next round of federal stimulus will be disjointed, contentious and extremely action-packed,” Walker said.

Broeksmit noted several “good, bad and ugly” points from his perspective. “The good is that the mortgage market has–remarkably–continued to stay strong throughout this,” he said. “As the crisis deepened, it seemed like a game of whack-a mole; every day there was something else that might prevent real estate finance from continuing. From appraisers being leery of setting foot into strangers’ homes and people not wanting strangers in their homes to county courthouses closing to an inability to verify employment, all the very basic parts of lending.”  

As a result, the market froze for a time, Broeksmit noted. “There was a scare, certainly, when nobody was buying anything but Treasurys,” he said. “Then the Fed stepped in and mortgage markets got back to sort of normal, actually.” He said purchase mortgage applications were higher than the year before for the past two-plus months.

Broeksmit noted when the pandemic started purchase mortgage applications were about 35 percent behind due to closures, “and now they are ahead nine weeks running, which to me is remarkable,” he said.  

One plus in the current environment: current low interest rates are a form of free economic stimulus, because homeowners can refinance and buy more house than they would have otherwise, Broeksmit said.

“The bad and the ugly, of course, are the suffering that so many Americans with these enormous, unprecedented unemployment rates are going through and really–and this is good and bad–is the real awakening about the racial inequalities in this country which, of course, started from a bad, ugly event, but I think has the potential to move the needle in ways that we have not seen in generations.”