Good News in the Housing Market

I'll bet you all had given up on getting any good news on the housing market front! But here it is, front and center in many of today's financial publications!

Fannie Mae and Freddie Mac have just announced that they're going to provide help to subprime borrowers. The CEO of Fannie Mae will testify before Congress today that they are coming out with a new loan program to help borrowers transition out of some of the high risk ARMs. And credit requirements will be loosened to help more people qualify. In addition, Fannie Mae and Freddie Mac will be buying more 30 year fixed and 40 year fixed mortgages on the secondary market.

You're selling your home and wonder how that helps you? I'm glad you asked!

This should mean a reduction in the number of foreclosure properties coming on the market. Foreclosure properties drive prices down. Financial institutions have absolutely no emotional attachement to the houses they sell. They never, ever say with great indignation "I am not giving this house away!" They simply do what it takes to sell the house. In this market that means lowering prices dramatically below similar properties on the market. That makes it tough on every other seller in the neighborhood, both from the perspective of holding the line on price reductions and on getting the property to appraise at what you do sell it for. So this is definitely good news.

I also think it's quite possible that a secondary result of today's news may be a slight lowering of interest rates. More money available from Freddie Mac and Fannie Mae in the secondary mortgage market could help on that front as well.

These days, sellers need to look a little harder for the good news! But there is some out there today!