Several months ago Karl Case of the Case-Shiller Report said, “If you have a realistic version of the American dream, buying a house now can make a lot of sense.” Case is considered the guru on real estate pricing. If you don’t believe him, how about the Gallup Poll in January that says 67% of Americans say now is a good time to buy. Why? Like we said in our last article, interest rates are still at historic lows (even though they are inching up) and prices of homes are still below prices seen since 2006.
We have seen an increase in buyers since January, the prices of homes in our area are up 16% from January 2010 and homes are on the market for an average 39 days. Expectation in prices of homes will continue to rise starting mid 2011and continue upward through current projections of 2015. Interest rates will surely follow. Considering all this, it certainly looks like now is the time to buy.
But what about the announcement that the government is going to eliminate Freddie Mac and Fannie Mae? How will that affect the buyers and the market? The Reforming America’s Housing Finance Market Report to Congress in February 2011, stated the Administration wants to develop a plan to responsibly reduce the mortgage market role of Fannie Mae and Freddie Mac and, ultimately, wind down both institutions.” They are suggesting increased down payment requirements, and other measures. In other words they want to increase the private capital in the mortgage market thereby “reducing taxpayer risk.”
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