Tallahassee Real Estate Blog

The Obama administration unveiled its proposal to reform the ailing housing finance market today.  The plan broadly calls for the winding down of Fannie Mae and Freddie Mac, two government-sponsored enterprises that guarantee 90% of the new mortgages written in the US.

There are many pros and cons to changing the role of the government in housing finance from both sides of the political spectrum.  So we'll leave that debate out of our Tallahassee real estate blog today.  But it's almost certain that any reduction to the role of Fannie and Freddie will increase the cost of obtaining a mortgage through higher interest rates and risk-reduction fees since the government will not be the "backstop" in case of a market failure, and investors will demand more interest in return for the increased risk.   

Buyers - not only do you have to contend with rising interest rates from the normal market, you may see an increase in costs due to this issue.  It may be time to lock-in those low rates, and purchase a Tallahassee home now. 

Sellers - this will add to the already stiff winds keeping home prices down.  If you wait a year to sell because you don't like today's prices, you may be taking a big gamble on your Tallahassee home sales price. It's not likely to be any higher next year.   

If you'd like to know more about why Fannie and Freddie affect your Tallahassee home, please call us at 850.445.2476.