Will bailout help buyers?
The funniest blog comment I have read so far about the Federal government bailout of FNMA and Freddie Mac was, “There goes the American peso…I mean dollar.” It will cost each of us taxpayers, but will it help purchasers?
Given that conforming interest rates (a loan of up to $417,000 in California) fell about half a point today, maybe it will give a boost to some buyers. Despite any interest rate improvement, lenders continue to apply extremely strict standards (credit, employment, available funds) for qualifying. Nonetheless, if you are thinking about buying, your timing just got better.
Although home prices could drift downward in the next year or so, the combination of excellent rates and soft prices is very appealing. As I always tell my clients, do not assume a good situation will last forever.