patrick.net

""There's a substantial risk of home prices falling another 15%, 20% or 25% more," he said."

"It's clear now that, going back to last fall, the apparent strength was a false strength," he said. "Now that the tax credits are gone, we're back to where the training wheels are off, to normal consumer demand."

SF ace says

That will hurt home prices.

Mission statement...
Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.

Hurt ? I dont think so. Prices fall making it much easier to buy and finance, and certainly to bring stability to US home market. The further prices fall, the better it gets.

SF ace says

There’s also talk of possibly ending the mortgage interest tax deduction for many homeowners. Meanwhile, the weak economic recovery may be threatened by higher oil prices as a result of turmoil in the Mideast.”

The IT deduction is a relief when we had high interest rates and high inflation. But that isnt happening today. Might as well do away with it. No use anyway in a low interest rate environment. Actually will close the budget deficit much faster. Time to sacrifice...

SF ace says

Thomas, logic and reality does not have to reconcile. Fannie/Freddie, MID is not going anywhere for at least 5-7 years if ever. You need to understand who you are dealing with first.

i’ll take an offer from one person and bet 1K that 2011 will be status quo with regards to MID and Fannie/Freddie. Even odds.

Hey SF Ace... Ok, let's assume your correct.. But the fact that Mortgage Interest Deduction will even be on the table for removal in the future... That scares me as a potential first time home buyer. My god, who in their right mind would buy a home at today's prices when interest rates rise to 10% or more you can't deduct that interest!

As long as MID is on the table for removal even in the next 10 years... that will effect buyers psychology...

There are no plans to do anything about Fannie and Freddie in the short term. Nothing will be done for at least 5 years. On this issue, Shiller is groslly misinformed and is spreading misinformation, which is quite bad considering Shiller can easily call the personal number of a member of Congress to find out what will happen to Fannie and Freddie if he wished.

Shiller is also misinfomed about the mortage interest deduction. If it is discontinued (and that is a VERY big if) only the top 2% of wage earners would lose it. Shiller makes it sounds like someone making $50,000 a year won't have it anymore. Hopefully Shiller's comments are not being read by a lot of people because they are total garbage.

HousingWatcher says

There are no plans to do anything about Fannie and Freddie in the short term. Nothing will be done for at least 5 years.

http://www.housingwire.com/2011/02/11/treasury-report-advocates-slashing-gse-jumbo-loan-ceiling

Mr.Fantastic says

Ouch.
Housing bulls?

THERE IS NO DECLINE

THE DECLINE IS SEASONAL VARIATION

THE DECLINE IS FLAT, BECAUSE THERE IS NO DECLINE

Los Angeles Renter says

My god, who in their right mind would buy a home at today’s prices when interest rates rise to 10% or more you can’t deduct that interest!

Like a bond valuation problem. The price goes down to meet demand.
At the end ..No big deal ...So what!

thomas.wong1986 says

SF ace says

That will hurt home prices.

Mission statement…

Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.
Hurt ? I dont think so. Prices fall making it much easier to buy and finance, and certainly to bring stability to US home market. The further prices fall, the better it gets.

Correct, but according to baby boomers and our corporate overlords, "hurting" = "you're not being gouged enough when you buy a house".

SF ace says

Thomas, logic and reality does not have to reconcile. Fannie/Freddie, MID is not going anywhere for at least 5-7 years if ever. You need to understand who you are dealing with first.

You willing to make a $400k bet on it? There's no economic justification for the MID or Fannie/Freddie. Beyond the politisphere's pressure from the RE lobby fucks, it ought to happen and very well could.

SF ace says

You need to understand who you are dealing with first.

Tax codes get changed all the time.

More discount on the way.

http://news.yahoo.com/s/ap/20110224/ap_on_bi_ge/us_foreclosure_sales

...fewer foreclosed homes were sold in 2010 than were taken back by banks, foreclosure listing firm RealtyTrac Inc. said Thursday.