Fannie and Freddie, what have you done?
So it seems that mortgage giants Fannie Mae and Freddie Mac have returned to their roots as government programs. While this is certainly another sign of the tenacity of the credit crunch, it should also calm the market’s fears to know that the government will continue to support the financing markets with all that that implies. Meanwhile, the credit pendulum goes on swinging too far in the other direction. Because so many borrowers unworthy of credit received it, now too many reliable, credit-worthy borrowers can’t get it!
For buyers who CAN get a mortgage, all this uncertainty clearly makes it hard to pull the trigger on a purchasing decision. I am reminded here of Warren Buffet’s words that you always pay extra for a cozy consensus. It is certainly far easier to buy when the herd is buying. But no point in the market cycle is foolproof. My advice to buyers is always the same: don’t forget that the purchase of residential real estate is more a life decision than an investment decision. Do what is best for your life. Don’t try to time the market (none of us is that smart.) And remember that real estate, like any commodity, is going to fluctuate. Here’s the difference: while it is fluctuating, you are happily living in it. That’s what makes it unique.