Winter weather pummeled housing across much of the nation last quarter. As spring weather brings a thaw for busier months, the focus is now on whether there is enough inventory to satisfy demanding buyers, particularly first-timers. Low housing supply, tightened credit guidelines, increasing rates and rising prices are all stacking up against first-timers' odds at calling a place their own. No answer on when new Building Permits, which rose 7.5 percent to just over 1 million in March, will be approved for new home construction to meet demand.
Homebuyers in general are reportedly less confident about the market. Following January to February's 10 point drop in the monthly builder sentiment index from the National Association of Home Builders (NAHB), it rose 1 point (from 46 to 47) in March. Readings below 50 indicate that more builders view housing market conditions as poor, rather than good. This reflects builders' inabilities to find lots and labor, according to Kevin Kelly, NAHB Chairman. More than ever, buyers will be requiring the help of skilled real estate professionals to represent them in what could be competitive purchase transactions this season.
Fannie and Freddie on the Chopping Block?
Late last quarter, the Senate Banking Committee said it would introduce a bill to reform the U.S. housing finance system by scaling back and possibly eliminating Fannie Mae (FNMA) and Freddie Mac (FHLMC). The government-backed enterprises oversee the secondary mortgage market. By purchasing home loans from lenders, packaging them up, and selling them to investors as mortgage backed securities, they free up liquidity for lenders to continue financing homes. Both regulate home loan guidelines with the goal of making home ownership more attainable for Americans.
Fannie and Freddie were largely criticized for securitizing bad loans which contributed to the subprime crisis. This story will be watched closely for its impact on housing and potential future housing reforms for many years to come.
Homebuyers in general are reportedly less confident about the market. Following January to February's 10 point drop in the monthly builder sentiment index from the National Association of Home Builders (NAHB), it rose 1 point (from 46 to 47) in March. Readings below 50 indicate that more builders view housing market conditions as poor, rather than good. This reflects builders' inabilities to find lots and labor, according to Kevin Kelly, NAHB Chairman. More than ever, buyers will be requiring the help of skilled real estate professionals to represent them in what could be competitive purchase transactions this season.
Fannie and Freddie on the Chopping Block?
Late last quarter, the Senate Banking Committee said it would introduce a bill to reform the U.S. housing finance system by scaling back and possibly eliminating Fannie Mae (FNMA) and Freddie Mac (FHLMC). The government-backed enterprises oversee the secondary mortgage market. By purchasing home loans from lenders, packaging them up, and selling them to investors as mortgage backed securities, they free up liquidity for lenders to continue financing homes. Both regulate home loan guidelines with the goal of making home ownership more attainable for Americans.
Fannie and Freddie were largely criticized for securitizing bad loans which contributed to the subprime crisis. This story will be watched closely for its impact on housing and potential future housing reforms for many years to come.
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