Carlsbad home buyers… let do this!!!
September 9th, 2008 Categories: Carlsbad Business Community, Carlsbad City, Carlsbad Real Estate
CARLSBAD– As most everyone knows by now, on Sunday, the federal government put both Fannie Mae and Freddie Mac in to conservatorship.
Placing the companies in conservatorship, rather than receivership, could signal that the government does not intend to nationalize or liquidate Fannie Mae and Freddie Mac. Instead, under the terms of a federal law passed this summer, conservatorship is designed to allow the government to restructure the companies and return them to private control. Treasury officials have previously compared the process to Chapter 11 bankruptcy.-Seeking Alpha, 9/6/2008
So what does this mean to Carlsbad’s current and potential homeowners?
There are two primary impacts to our housing market.
Firstly, for existing homeowners, interest rates have already started to fall on fixed rate loans and are expected to continue trending downward for the next 3–6 months. This is great news for homeowners with loans that have rate adjustments coming in the future. However, being realistic, the changes in loan program, new qualifying guidelines and loss of equity, are 
going to be factors limiting the number of homeowners that can take advantage of this.
Secondly, for potential buyers and sellers, more importantly is the cause of the lower interest.
The reason rates have already gone down, currently at 5.88% down from 6.26% last week, is the potential for a large and consistent infusion of cash in to the mortgage market from the government. This infusion will ‘loosen’ the flow money which should help lower underwriting standards.(Isn’t this how we got into this predicament in the first place?)
The government hopes that loosening the purse strings will prompt lenders to lower underwriting standards and ease the credit crunch that has kept many potential home buyers on the sidelines.-San Diego Union Tribune,9/9/2008
With the significant drop in home pricing and our market’s high inventory, if you have been waiting to purchase, I would give serious consideration to the current market. Your new home is waiting for you and remember, if you are renting, you are buying a home. Just not yours.
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