New Loan Limits Should Stimulate Local Real Estate Market

March 14, 2008 - Harrington ERA Realty is anticipating a positive impact on the local real estate market from the new economic stimulus package recently signed into law by President Bush.

With the government raising the FHA conforming loan limits for ALL homes bought through the end of this year, much larger mortgages will qualify for purchase by government housing authorities Fannie Mae and Freddie Mac, lowering the interest rates for borrowers. As a result, buyers and existing homeowners can get lower interest rates on what used to be “jumbo loans” that were resulting in higher interest rates than conforming loans.

“The new government stimulus package presents a great opportunity for consumers to get off the fence and purchase their “Dream Home” and allow existing homeowners to strengthen their financial picture by refinancing their existing mortgage.” “Our 2007 national survey showed that baby boomers will look to take advantage of this situation. Our survey showed that one in five boomers plan on changing homes in the next few years; the timing couldn’t be better to buy!”

According to the National Association of Realtor, increasing the FHA loan limits will bolster the stressed housing market by infusing much needed capitol into the nations mortgage market. The study showed that the stimulus would result in as many as 500,000 refinanced loans and an additional 300,000 home sales. This would reduce local inventory and strengthen prices by 2-3%. “This is the kind of “shot in the arm” we have been looking for”, said Harrington. “Only positive results will come out of this as more and more of the general public realizes we are in a great buyers market”.