The AP would love to cry wolf and say that because new home starts are down, that we are headed for another catastrophic downturn. I am not saying this is a certain untruth, but it is not necessarily accurate. Every fall the housing starts go down and as any real estate professional can tell you, from Halloween to New Years is almost a mandatory vacation.
The feds decided to extend last years first time home buyer credit to include this year, as well as expand it to allow real estate investors to take advantage of it in an attempt to stimulate the real estate market as much as possible. This did bring the national real estate market seven percent appreciation and is expected to further stabilize the real estate market by continuing this appreciation period.
Most do not understand, but the implication of that are that Fanny Mae and Freddy Mac have "re-categorized" most every market in the nation to an appreciating market, from a depreciating market. This allows for Primary Mortgage Insurance which will allow banks to loan up to 100% loan to value, again. This will stimulate more home buyers due to the fact that more home buyers can afford to buy with zero money down.
Many people wonder if it wasn't the one hundred percent financing ideas that lead us into the mess we are in now, and they are right. The fact is that this exact type of financing is risky but it also does stimulate the real estate market by increasing the number of eligible buyers, which is what it was intended to do. The real estate market would be far more stable with people saving up the 20% down payment but the actions needed to stabilize the market in the short term required more drastic actions.
With the government continually mandating that banks loan to people who really don't qualify you can expect that we haven't see the end of the housing market woes, but the short term fixes should work. Hopefully the federal government will institute a long term remedy like a home purchase saving account that will exempt any money put into the account from taxes as long as it is used toward the purchase of a home.
Without stability in the housing market many out of work construction workers will simply not be able to find work, even in the short term. - 31366
The feds decided to extend last years first time home buyer credit to include this year, as well as expand it to allow real estate investors to take advantage of it in an attempt to stimulate the real estate market as much as possible. This did bring the national real estate market seven percent appreciation and is expected to further stabilize the real estate market by continuing this appreciation period.
Most do not understand, but the implication of that are that Fanny Mae and Freddy Mac have "re-categorized" most every market in the nation to an appreciating market, from a depreciating market. This allows for Primary Mortgage Insurance which will allow banks to loan up to 100% loan to value, again. This will stimulate more home buyers due to the fact that more home buyers can afford to buy with zero money down.
Many people wonder if it wasn't the one hundred percent financing ideas that lead us into the mess we are in now, and they are right. The fact is that this exact type of financing is risky but it also does stimulate the real estate market by increasing the number of eligible buyers, which is what it was intended to do. The real estate market would be far more stable with people saving up the 20% down payment but the actions needed to stabilize the market in the short term required more drastic actions.
With the government continually mandating that banks loan to people who really don't qualify you can expect that we haven't see the end of the housing market woes, but the short term fixes should work. Hopefully the federal government will institute a long term remedy like a home purchase saving account that will exempt any money put into the account from taxes as long as it is used toward the purchase of a home.
Without stability in the housing market many out of work construction workers will simply not be able to find work, even in the short term. - 31366
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