NAR Sees OFHEO Move as a Step Towards Alleviating the Credit Crunch and Improving The Housing Market 

 WASHINGTON, September 19,2007 - The National Associataion of REALTORS believes giving Fannie Mae and Freddie Mac more flexibility to address problems in the mortgage market will benefit the housing market.  In providing the ability to make a two percent adjustment to the portfolio limit formula for Fanni Mae, like Freddie Mac currently a has, OFHEO has aprovided another tool to help borrowers with more subprime loans and others having problems refinancing their mortgage.

"Every day, REALTORS see firsthand with their customers and clients that the mortgage market has not fully improved from the turmoil that began earlier this year," said National Association of REALTORS President Pat V. Combs. "Director Lockhart's actions today send an important signal to America's homeowners and buyers that the government recognizes that there is a major problem and that  it is willing to act."

"It really is becoming a better time to buy a home. Over the past two days, actions by both houses of Congress to reform FHA programs, and the Federal Reserve to decrease interest rates, should make borrowing more affordable and money more available. With reduced housing proces and increased housing inventory, interest rates that are near historic lows, and now with Fannie's and Freddie's increased ability to lend, we may see positive movement in the housing market," said Combs.

On August 13, NAR joined with the Mortgage Bankers Association and the National Association of Home Builders in asking Director Lockhart to approve a temporary increase in the portfolio caps for FAnnie Mae and Freddie Mac to meet urgent credit needs, consistent with safety and soundness. "Congress should act now to increase Fannie Mae's and Freddie Mac's conforming loan limits to help borrowers in higher cost areas who are finding it extremely difficult to secure affordable financing. This would have the effect of making more money available for more of our nation's borrowers," said Combs.

The National Association of REALTORS, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

FED RATE CUT MAKES HOMEBUYERS WINNERS

WASHINGTON, September 18, 2007 - The federal Reserve's decision to ease its monetary policies will boost a housing market beginning to rebound, help restore consumer confidence in the real estate market, and could give a helping hand to borrowers with adjustable-rate mortgages (ARMS), according to the National Association of Realtors.

"We believe that the Federal Reserve Board made the right move today in lowering the interest rate," said Pat V. Combs, president of the National Association of Realtors and vice president of Coldwell BAnker-AJS-Scmidt in Grand Rapids, Mich. "Making borrowing more affordable will make money more available and this could go a long way in helping turn around the sluggish housing market."

NAR, as the leading advocate for homeownership, believes that the Fed rate cut, along with home prices coming down in many location and an increased inventory of homes to choose from, makes this an excellent time to buy, Combs said. "The housing market has been correcting itself and restoring affordability. With interest rates on many conventional loans still at near historic lows and today's rate cut possibly making loans even more affordable, we bellieve the housing market will begin to recover over the coming year," Combs said.

Combs added that the lowered rate could also help those with ARMs as they reset.

The National Association of Realtors, "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Home Prices Expected to Recover in 2008 As Inventories Decline

WASHINGTON, July 11, 2007 - 

Home prices are expected to recover in 2008 with existing-home sales picking up late this year and new-home sales rising early next year, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR senior economist, said a good buyers’ market has evolved.  “Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,” he said.  “But with profit margins coming under pressure, homebuilders will limit new construction well into 2008.  This should help the overall inventory level to move steadily into a more balanced state.”  

Existing-home sales are expected to total 6.11 million this year and 6.37 million in 2008, down from 6.48 million last year.  New-home sales are projected at 865,000 in 2007 and 878,000 next year, compared with 1.05 million in 2006.  Housing starts, including multifamily units, are forecast at 1.43 million units this year and 1.44 million in 2008, down from 1.80 million last year.

Existing-home prices are likely to rise 1.8 percent to a median of $222,700 in 2008 after a 1.4 percent decline this year to $218,800.  The median new-home price should rise 2.2 percent to $245,400 next year following a 2.6 percent drop in 2007 to $240,100.

“Markets that sharply reduce new construction in 2007 will generally experience respectable price increases in 2008,” Yun said.  “Local conditions vary considerably, but with historically low mortgage interest rates this summer and sustained job gains, it could be a good time for first-time buyers with a long-term view to test the housing waters.”

The 30-year fixed-rate mortgage is estimated to average 6.7 percent during the second half of this year, and fluctuate around 6.6 percent in 2008.

Growth in the U.S. gross domestic product (GDP) will probably be 2.0 percent in 2007, compared with a 3.3 percent growth rate last year; GDP is forecast to grow 2.8 percent in 2008.

The unemployment rate is likely to average 4.6 percent in 2007, unchanged from last year.  Inflation, as measured by the Consumer Price Index, is projected at 2.6 percent in 2007, down from 3.2 percent last year.  Inflation-adjusted disposable personal income should rise 3.0 percent this year, up from a 2.6 percent gain in 2006.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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 The above article was published by NAR 7/12/07