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Nudge Turns to Shove

This was the week when federal officials showed just how serious they are about stirring up the housing market. If an $8,000 tax credit for first-time buyers wasn't enough to draw buyers off the sidelines, the Federal Reserve announced it would throw another trillion (plus a couple billion) more dollars into the bond markets to drive interest rates even lower. Lenders started quoting 30-year mortgage rates around 4.5 percent almost immediately. If this doesn't shoot some adrenaline into the market, it's hard to imagine what will.

Also this week, the feds unveiled a handy Web site to help consumers find their way toward a government-assisted refinance, a loan modification or a credit counseling session. It's a good clearinghouse of calculators, interactive worksheets and links. (You may also want to try the interactive guide to the homeowners bailout plan put together by my colleague Renae Merle, which has better news for owners wanting to refinance vacation homes or small investments, based on the rules published by Fannie Mae and Freddie Mac.)

In this Saturday's Real Estate section, watch for a story about the much friendlier reception you can expect when you call a remodeler. Karen Tanner Allen reports not only that will they return your phone call, but also that they won't sneer at your small job they way many did not long ago.

And don't forget, today is chat day. Real estate editor Maryann Haggerty and I will be online at 1 p.m. to talk about whatever is on your mind. You can submit your questions and comments ahead of time if the boss has scheduled a lunchtime meeting.

The Weekend Poll




By Elizabeth Razzi  |  March 20, 2009; 6:00 AM ET
Categories:  The economy , The market  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Department of Hopeful News
Next: The Market's Spring Thaw?

Comments

The incentives are large, and I think they are being reflected in the rapid activity in Kingstowne (that and the lower prices). But, while I'd like to buy this year rather than next, I don't think we'll truly find the bottom of the market until these incentives are gone and people are buying purely based on the price of the house, not the free money from the fed or absurdly, unsustainably cheap debt. So, preversely the incentives make me want to wait until they're gone. We'll see if that rational side of me wins out though.

So, I would add another button that says: the incentives make me want to wait longer.

Posted by: kingstowne_renter | March 20, 2009 8:42 AM | Report abuse


Prices have come down fractionally, but in most areas, they still have QUITE a ways to go before they are back in line with historical fundamentals relating to two things: WAGES & RENTS!! (there is a great debate on the buy vs. rent argument on www.patrick.net)

When you could rent the same property for half the cosst of a mortgage, then you know the market is still way over-valued!!

ALSO, with SO many people that have either lost their jobs, or are worried about losing their jobs, WHERE are they going to come up with the sizeable down payments, now that the easy money financing is GONE??!!!

When you add it all up it equals much lower housing prices in the future. Buying a house at a LOWER PRICE is the only winning solution---The low interest rate is not enough.

Posted by: misssymoto | March 21, 2009 9:24 AM | Report abuse

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