Fannie and Freddie - How do YOU Benefit?
Posted September 8, 2008 10:05 p.m. EDT
Updated September 8, 2008 11:17 p.m. EDT
You may be thinking that since the government got involved with taking over the GSE’s (Government Sponsored Enterprises) temporarily, this must certainly be great news - but how exactly is this government bailout going to help YOU as a consumer, and more importantly how is it going to help the beleaguered housing industry? Well fortunately for you, I’m here to answer those questions.
The quick answer is – as a consumer, you probably won’t feel much of a difference in the day to day operational aspect of either of the GSE’s – but as we’re already seeing, there has certainly been increased downward pressure on interest rates (rates are improving) – and this may be just what the industry has needed – a catalyst to help return the housing market to glory. One of the biggest problems for the housing industry in my opinion is that consumer confidence has been eroded to levels which do not support the regular flow of supply/demand – hence the slowdown. Here in the triangle, it’s not about declining home values, quality of homes or lack of available credit –it’s truly been the suppressed level of consumer confidence which is putting many potential homeowners on the purchasing fence, as well as the domino effect of people moving to the triangle (still one of the most desirable areas in the country to live), and their inability to sell their homes in the markets they are coming from…
With all of this happening, the clear sign right now is - it’s a GREAT time to be thinking about buying a new home or refinancing your current home. Rates are approaching forty year lows again (remember 2003?), and with those lower credit costs come the flexibility of budgets and the return of consumer confidence. This is what the entire housing industry has been waiting for – and while it is still very early on in the recovery process, I believe that this is a huge step in the right direction.
Keep a close eye on things to come in the very near future – starting with the remainder of this week. It will be very interesting to see how new economic news, coupled with the Fed’s intervention - plays upon both the Main Street and Wall Street psyche.
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.