Fear Over Reduction in Cap on Federally Supported Mortgages

Many are fearing the end of federal subsidies for mortgages above $417,000, according to today’s New York Times. Of course, the National Association of Realtors wants more federal support of expensive mortgages, but that is an argument against it.  At some point, the Federal Government needs to recognize that prices must return to their pre-boom levels for those prices to make sense. In many areas, this has happened.  In the more expensive areas along the coasts, however, prices remain considerably higher than before the boom hit. For those of us looking to buy a first home, this has made things very difficult.  Federal support has helped keep prices higher than they ought to be and for new home buyers, the end of the increased conforming loan limits and FHA guarantees should help get you in a house at a much lower price.

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