By now you probably know that both Freddie Mac and Fannie Mae have had very poor quarterly reports. Worse than expected. And now we’re in for worse trouble.
Money is now expected to be tighter as we roll into the fall and home buying will continue to be slow due to the fact rates will be higher and people will be disinclined to borrow and therefore buy.
Don’t mind the fact that having the media and the industry simply telling the public that it’s bad probably causes a lot more people to sit on their hands.
With home prices as low as they are now, it’s the best time to buy. The cost of money is already low and continues to be offset by the lower home prices. This should be the best time to buy a home if you don’t own one.
Plus you get that great $7,000 loan tax credit from the government!
I have limited concern for the two big home loan banks. Maybe I’m being too callous, but investments have an element of risk, and everyone’s complaining that those who invest in the banks are losing money. That’s the risk. People lose money in investments, even the not-so-risky types, and it’s accepted as part of the process. You win some, you lose some, and you hope that you win more than you lose. Yes, my 401K is impacted by this, but in two years it will bounce back.
More importantly is ensuring that home buyers know they have an opportunity right now, and that the state of the market is in their favor.
If you want to and can, go buy a house!
Make sure you can afford it, thought.
(Links from The Wall Street Journal web site)