Brace yourself, Bridget

U.S. government’s housing aid to end.

ELKHART, Ind. — Over the next six months, the federal government plans to wind down many of its emergency programs for housing. Then it will become clear if the market can function on its own. People here are pretty sure the answer will be no.

To the extent that the real estate market is functioning at all, people here say, it is doing so only because of the emergency programs, which have pushed down interest rates on mortgages and offered buyers a substantial tax credit.

Equally important is an expanded mortgage insurance program run by the Federal Housing Administration, which encourages private lenders to accept borrowers with small down payments. The government takes the risk of default.

A few years ago, only one in 10 buyers in Elkhart used the housing agency program. Now about half do. Across the country, the agency has greatly expanded its reach so that it now insures six million mortgages.

“There has been all kinds of help for housing. I’m not unappreciative,” said Barb Swartley, president of the Elkhart County Board of Realtors. “But you can’t turn real estate into a government-sponsored operation forever.”

Not that the Dems won’t try, but I believe Ms. Swartley’s onto something here.

UPDATE: Stimulus funds running out for skooles two!

3 Comments

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3 responses to “Brace yourself, Bridget

  1. Anonymous

    So which Scam ends first?

    US gvt attempt to prop up housing mkt

    Or China

    Suspect the two Scams will be interactive as they unravel

  2. Hate to be provincial but but do you think this will affect affluent Fairfield County?

    • christopherfountain

      Well, people who buy here often have to sell a house somewhere else, and if “somewhere else” tanks, then ….
      When the sub-prime mortgage mess first reared its ugly head I figured, “who cares? No sub-primes in Greenwich”. I was wrong then, and if I thought that the rest of the country’s real estate market could collapse without affecting Fairfield County, I’d be wrong now.