The Housing Headline
Home buyers are getting massive stimulus from the federal government’s banking and mortgage agencies.
The News Behind The Housing Headline
Monday morning, the Federal Reserve announced unlimited support for mortgage markets; and, the Federal Housing Finance Agency (FHFA) announced changes in how mortgages can be approved.
The Federal Reserve committed cash “in the amount needed” to make sure that mortgage lenders can still make loans, and to help keep rates suppressed. It’s expected that the Fed will commit more than $1 trillion to the endeavor – five times the $200 billion commitment it made just last week.
The FHFA, which runs Fannie Mae and Freddie Mac, made similarly bold moves. The agency’s made changes that make lenders less reliant on their own cash to fund new loans and that supports more lending.
It also gave lenders the ability to skip in-home appraisals, where possible.
Why This Housing News Matters To You
You’re a first-time home buyer, and you’re important to the U.S. economy. The federal government wants to protect you. And, this morning, it took drastic measures to make sure you can still buy that house you want to buy.
The Federal Reserve put downward pressure on mortgage rates. It also gave lenders a larger pool of money to lend from. Fannie Mae and Freddie Mac removed roadblocks in the mortgage approval process by allowing appraisals and other key steps to go virtual.
And, this is just the start.
Since 1934, when FDR created the first federal mortgage program, the U.S. economy has revolved and rallied around housing. Housing and housing policy brought us out of the Great Depression. It brought us out of the 2007-2009 recession. And, the government will use it to lift us out of COVID-19, too.
It’s an excellent time to be a first-time buyer who buys with the help of a government-backed loan, which 96% of mortgages are.
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Home buyers snatched up properties for sale in May as housing made its v-shaped recovery.