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...