1.     Housing expense relief for median income homeowners: Many of the markets hit hardest by the current housing slump are metro/suburban areas with high average sale prices. Fannie, Freddie and FHA will now offer conforming rates, substantially lower than non-conforming jumbo rates, on median priced homes in these markets. A typical homeowner in a metro suburb might have a $600,000 home and a $500,000 mortgage. They will receive a $4-5,000 annual savings by refinancing.
 
2.   The current housing market is slow due to a standoff between sellers and buyers based largely on price. Buyer demand is strong but reluctant, and patient for a better deal. This mortgage benefit represents a significantly better mortgage deal and it is temporary. This will release a pent-up demand and warm up the market.
 
3.   From a macro perspective, Fannie, Freddie and FHA will stabilize and guaranty liquidity in the housing market. Loans above the former $417,000 limit were all backed by banks and Wall St. investment firms. Those firms can be volatile and decide not to back mortgages; Fannie, Freddie and FHA will not. Fannie, Freddy and FHA are also chartered to back mortgage loans, so they will provide the needed liquidity.

About Prudential Rand Realty

Prudential Rand Realty, Inc., founded in 1984, is the No. 1 real estate brokerage in the Greater Hudson Valley with 20 offices serving Westchester, Rockland and Orange counties. Based on market share, Rand is the No. 1 real estate company in Rockland, No. 1 in Orange and No. 3 in Westchester. The company has more than 700 sales associates. Rand’s Web site is www.PrudentialRand.com.