The housing market is constantly evolving and there are many factors affecting that – new laws, economic stability and overall changes in the society. One of the most controversial parts of this market is the sector that involves mortgage.
In truth, one of the contributing factors that enabled the national real estate industry to recover from the housing slump continues to be the low mortgage rates. These rates provide homebuyers with renewed confidence to invest in real estate once more. But how long will it stay low? The market has enjoyed the low rates for quite some time now and it is unknown to some if it will climb higher in the near future.
This is actually where the government comes in to assist the housing market. While the private housing finance system was trying to rebuild itself, the government supported that by setting up organizations like FANNIE MAE and FREDDIE MAC that gave life to the secondary mortgage market. This market is responsible for relieving banks and other private institutions of some mortgage so they have enough to fund other borrowers.
In effect, the secondary mortgage market helps more citizens get a hold of financial aid to be able to purchase their homes. However, the Federal Housing Finance Agency or FHFA expressed concern that this sector is not well equipped for adapting to various changes in the market. The need for some serious updating of the infrastructure is more evident and vital to make sure the recovery of the housing market will stay strong and stable. These will ultimately affect the rates, credit requirements and other qualifications tied to the borrowing opportunities of the home buyers market.
One of the things that the government looks into for salvation and support is from the private sector. They have to be able to rebuild the system to support what was set up to support them in the first place. However, this can prove to be a double edged sword. It can definitely bring forth a more competitive platform for the mortgage lending sector but it can prove to be beyond the government’s detail control and may be subject to possible abuse.
The solution of course, lies in a merger of ideas and interests. The government welcomes the private sector to voice out their opinions on improvements for the housing market financial system.While that is true, the government maintains the right to strictly set up and enforce regulatory infrastructures that will maintain a fair and transparent pricing in the real estate market.
Financing is a vital part in the real estate industry and the government has a lot to work on to make sure this system keeps pace with the market trends. Consumer financial capabilities and market reactions are important considerations as they rebuild a more stable system for the housing financial market.
If you have more questions about the housing market, Guldi Group is here to assist. Whether you want to buy, sell or invest in the real estate market, we can help you bring that into reality.
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