The National Association of Realtors® congratulated the U.S. Congress for quickly passing a national economic stimulus package and thanked President George W. Bush for his leadership and willingness to promptly enact legislation that will help thousands of families, the housing market, and the U.S. economy.
Increasing the loan limits would help stem the tide of foreclosure by providing lower-cost refinance options to consumers with subprime or jumbo loans. It also could generate 300,000 additional home sales and help raise the median home price, according to NAR's research. These are real results that would strengthen the housing market and local and national economies.
"We believe the economic stimulus bill will quickly impact the nation's families and economy," said NAR President Richard Gaylord. "We are pleased that both the Federal Housing Administration (FHA) and the Fannie Mae and Freddie Mac (GSE) loan limits have been increased, even if only temporarily. This will be a major stimulus for the housing industry and for people who want to own a home."
Increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home, according to NAR research. In addition, NAR believes increasing the loan limits for Fannie Mae and Freddie Mac will bolster the severely stressed housing finance market by immediately infusing much needed liquidity into the nation's mortgage market.
"While such an increase will not solve the full range of housing challenges, it will play a vitally important role in improving the nation's economy and making the dream of homeownership more attainable for thousands," said Gaylord.
An economic impact study conducted by NAR earlier this month estimated increasing the GSEs' conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.
"These are real results and will have an immediate and sustainable impact for families across our country," said Gaylord.
"Increasing the conforming loan limits will benefit families who live in areas where the price of housing is beyond the norm. We live in such an area. The economic stimulus package will also help stabilize the economy," said Silicon Valley Association of REALTORS® President Leannah Hunt.
Hunt, who is a Realtor with Coldwell Banker in Palo Alto, said the economic stimulus package will open doors for homeowners, as well. "The stimulus package will present a very good opportunity for a lot of people to do some refinancing and get over a big financial hurdle," said Hunt.
"Undoubtedly, there will be further foreclosures with the resetting of the rates, but we are fortunate that in the Silicon Valley area, foreclosures are not as dominant an issue compared to other parts of the state."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
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For further information, please email or call the SILVAR office at (408) 200-0100.