As you no doubt heard over the weekend, the federal government announced the takeover of Fannie Mae and Freddie Mac, the two companies that currently guarantee roughly 70% of all new U.S. home loans.
This historic step should help stabilize and restore confidence in the U.S. mortgage markets and the overall economy, which also is good news for the Charlotte NC housing market and new home builders. The government’s action also helps to re-establish Fannie and Freddie as federally chartered financial institutions working for the American people.
I am encouraged by the possibility that the takeover may drive down mortgage rates and create some renewed demand for new homes among qualified buyers. Already this morning, I saw 30-year mortgage rates decrease by 3/8% from 6.24% to 5.875%. In the coming days, we could see 30-year interest rates back in the mid-5% range. In the near term, I expect no significant changes in the way we do business with Fannie Mae and Freddie Mac and believe our homebuyers will benefit from this action.
Let me know what you think about the takeover. Do you think it will help or hurt us in the long run?
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