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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 58 April 2025 J O U R N A L say they are not concerned about losing their job in the next 12 months decreased from 78% to 77%, while the percentage who say they are con- cerned increased from 22% to 23%. As a result, the net share of those who say they are not concerned about losing their job decreased by 1 percentage point month over month to 55%. • Household Income: The percentage of respondents who say their house- hold income is significantly higher than it was 12 months ago increased from 17% to 18%, while the percentage who say their household income is significantly lower increased from 9% to 11%. The percentage who be- lieve their household income is about the same decreased from 73% to 70%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 1 percentage point month over month to 7%. THE IMPORTANCE OF FLOOD INSURANCE EDUCATION H ow important is flood in- surance? Homebuyers who are looking to purchase in a Special Flood Hazard Area (SFHA) may encounter challenges even after obtaining financing and getting ready to close because they cannot proceed without it. The National Association of Realtors (NAR) analyzes how the NFIP promotes and impacts local and nation- al home sales and economic activity in a new report. If the property is in an SFHA, lend- ers will require f lood insurance prior to approving the loan. However, f looding is not covered by a typical homeowners insurance policy. This implies that the buyer would have to get f lood insur- ance through the private sector, which does not provide f lood insurance in many parts of the United States without the National Flood Insurance Program (NFIP). If private f lood insurance is not available, property transactions and loans may be postponed or canceled nationally in numerous f lood zones. In addition to buyers and sellers, this disruption might have repercussions for the economy, associated sectors, and the larger real estate market. Potential Homebuyers & Sellers Remain Affected by Flood Insurance Property owners and purchasers are forced to rely on the private insur- ance market, which does not reliably offer f lood protection, in the absence of the National Flood Insurance Program. Since lenders demand f lood insur- ance as part of the mortgage approval process, this poses a serious problem for homebuyers buying in FEMA-desig- nated SFHAs. Because of this, many buyers in f lood zones might have to wait to close their loans until they have obtained f lood insurance. If the delay is too long, some contracts may expire, leading buyers to renegotiate or back out of the deal. From the seller's point of view, this leads to more market uncertainty and lengthier listing periods. According to NAR, the NFIP is nec- essary for 1,360 home sale closings per day, which translates to about 41,300 impacted monthly transactions across the country. Florida's housing market will be most impacted, followed by Texas and California; however, the effects will differ per state. Approximately 14,870 Florida home sale closings rely on the NFIP each month. Another 3,590 and 1,680 house sale closings in Texas and California, respectively, are guaranteed by the program. How Will This Affect the U.S. Economy? Or Will It? Economic activity is also signifi- cantly inf luenced by the housing market. Beyond its main purpose, the housing industry produces a number of initiatives that boost economic expansion and increase GDP through home sales, renovations, and construc- tion. Although personnel and resources are needed for these activities, they also boost output and provide jobs in a variety of sectors, including manufac- turing, retail, and construction. Additionally, buying a property, especially an older one, usually results in higher consumer spending. To up- grade and customize their living areas, these new homeowners frequently spend money on furniture, appliances, services, and home renovation projects. However, the housing industry has an even greater economic impact. Jobs ranging from architects and builders to interior designers are created by the labor-intensive process of building new homes and remodeling old ones. In addition, the real estate industry employs a large number of profession- als, such as mortgage lenders, brokers, and agents. Therefore, a thriving housing market can have a significant positive impact on people's salaries and unemployment rates. NAR calculated that, in the absence of the NFIP, overall income losses might amount to $69.7 billion annually after calculating the revenue from each state's home sales. This amount roughly corresponds to Alaska's GDP. The NFIP's economic benefits are broken down by each state in the map below. The states with the biggest annual local income losses without NFIP are Florida ($23.0 billion), California ($5.5 billion), and Texas ($4.9 billion). Because of the magnitude of these economic impacts, it is essential to guarantee consistent and dependable access to f lood insurance, not just for homebuyers and sellers but also for pre- serving overall market and economic stability.