Top 10 Real Estate Developments in the ’00s: #3
Filed under: Economics, Law & Policy, Mortgage Financing, Politics & Government
By Brian Summerfield, Online Editor, REALTOR® Magazine
We’ve cracked the top three! Here’s the next installment of our series on the top developments in real estate this past decade:
#3. Government-Led Recovery
When it became apparent in the later years of this decade that the housing market wasn’t just going through a small correction and would not resume its rise, economic policymakers in the federal government took action to solve the crisis in residential real estate, as it was viewed as critical to the broader economy. In fact, President Barack Obama listing housing as a key recovery “metric” in one of his first televised speeches in office.
Thus far, the results have been mixed. For example, the home buyer tax credit has turned out to be very popular among real estate pros and consumers, and arguably effective to boot. On the other hand, loan modification programs have not met with as much success, due to reasons ranging from complicated processes to inadequate lender effort to scams.
In addition to entirely new (and supposedly temporary) programs, a couple of established federal institutions have put forth considerable efforts to spark a recovery. First, the FHA stepped in to fill much of the void in mortgage financing caused by the breakdown of Fannie and Freddie. (In fact, nearly 40 percent of recent buyers used FHA loans, according to the latest REALTORS® Confidence Index.)
Also, the Treasury Department and Federal Reserve each have bought loan securities to provide additional financing for mortgages, though it’s not clear how many they’ll continue to buy and for how long.
Now, the complete and cumulative effect of these endeavors is debatable, and probably won’t be fully understood until years from now. But we can say one thing for sure: Without the government’s intervention, the housing market would look very different right now.
Other Major Real Estate Developments of the Decade
2. The Fall of Fannie and Freddie
[...] 3. Government-Led Recovery [...]