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"We believe that any stimulus package must address housing issues and
increasing the conforming loan limits for these two government-sponsored
enterprises," said NAR President Dick Gaylord, a broker with RE/MAX Real
Estate Specialists in Long Beach, Calif. "The increase in loan limits would
not only improve liquidity in the mortgage marketplace, but also boost
homebuyers' confidence levels, resulting in increased sales and economic
NAR has been calling on Congress and the administration to increase the loan
limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to
$625,000. "This change will permit more families to enter the housing market
by making more mortgages available with lower interest rates. Increased home
sales will lower inventories and immediately start stabilizing the housing
market and the economy," Gaylord said.
Uh, no. That bubble must burst. What weird idea is it to make cheap money even more available? To extend that horrible bubble? What do you think happens, if mortgage rates go down even more? That you can suddenly afford more home? No - what happens is that prices go up even more. Dollar inflation in the housing market.
If one can't afford jumbo loan rates, then, well, don't buy that house.
Uh, no. That bubble must burst. What weird idea is it to make cheap money even more available? To extend that horrible bubble? What do you think happens, if mortgage rates go down even more? That you can suddenly afford more home? No - what happens is that prices go up even more. Dollar inflation in the housing market.
If one can't afford jumbo loan rates, then, well, don't buy that house.
Yeah. I don't understand this obsession with cheap government subsidized money. We're running a $250 billion deficit. It's too late for a jumbo increase. If it happens, inflation will skyrocket and help to make the 70's look like a cakewalk. So what if your house goes up 5% in value if it costs $500 to fill your fridge?
"We believe that any stimulus package must address housing issues and
increasing the conforming loan limits for these two government-sponsored
enterprises," said NAR President Dick Gaylord, a broker with RE/MAX Real
Estate Specialists in Long Beach, Calif. "The increase in loan limits would
not only improve liquidity in the mortgage marketplace, but also boost
homebuyers' confidence levels, resulting in increased sales and economic
NAR has been calling on Congress and the administration to increase the loan
limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to
$625,000. "This change will permit more families to enter the housing market
by making more mortgages available with lower interest rates. Increased home
sales will lower inventories and immediately start stabilizing the housing
market and the economy," Gaylord said.
It's sad to think that throwing money at the problem fixes things.
Look at the DC school system. Look at Medicare.
Let the housing market take its medicine and stop looking for big daddy government to help out.
Freddie and Fannie are already in trouble - look for tens of billions in writeoffs from them coming soon. Forcing them to buy billions more in worthless jumbo loans will make it tougher for them to buy the stuff that deserves to be moving these days. Let the bubble markets fall in price so that you don't need a jumbo with 20% down and the problem fixes itself without any government intervention using my tax dollars.
In summary - easy access to stupid amounts of money caused this problem in the first place. Making the amounts available even stupider is not the answer to the problem. It'll just make the eventual crash even worse.
I think I read on yahoo on one of the articles tha tthey were going to raise it or would liek to raise it from 417K all the way to 700K. Wouldn`t that free up the market a bit or give people a foot to stand on again?
I think I read on yahoo on one of the articles tha tthey were going to raise it or would liek to raise it from 417K all the way to 700K. Wouldn`t that free up the market a bit or give people a foot to stand on again?
Problem is that people buy houses not by absolute value but by the monthly payment they can/want afford.
So if you have 0% mortgage rate and a home buyer can afford $2000/month on PI (with I=0), let's say 0 down, the price that the buyer will pay is $720000.
If you have a 10% mortgage rate, this buyer will shop for a $230000 home because that's all he can afford. And sellers have to price according to what the pool of buyers can afford and therefore high interest rates keep prices in check.
Because almost everybody shops by monthly payment alone ("my bank approved my for $xxx !!!), what lower rates achieve in the long term are inflated home values, NOT more affordable houses.
Low interest rates are also awful w.r.t. property tax. Because those are tied to the absolute value of the home in some states (like here in TX, DFW, if you buy a house, the tax appraiser appraises at market value = sales price).
If we would have had 10% interest rates instead of 5% (or 3% teasers), those CA/FL/NY astronomical valuations wouldn't have happened simply for the fact that the monthly payments would have been too high.
Definitely need this raised to $600-$650K - FL, CA, NY, AZ, NJ, GA
I went to GA recently - all the new homes were in the 600's!!!
CA and NYC maybe. Definitely not the other states you list. AZ and GA please.
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Jumbo loan limits
