In what is arguably the largest government intervention into the private sector, this weekend the federal government took control of struggling Fannie Mae and Freddie Mac in an attempt to ease the housing crisis and stabilize the lending market. Most analysts agree that the housing market cannot recover without a fully functioning Fannie Mae and Freddie Mac.
What will this mean for the buyers, sellers, Pleasanton real estate and the larger marketplace?
“Whether this is the beginning of the end or merely the end of the beginning is yet to be determined, however it is certainly the hope that this move will begin to calm the housing market and allow mortgage money to once again flow,” said Paul Nolte, analyst at Hinsdale Investments.
One good sign: mortgage rates dropped this week after the announcement. Analysts stressed cautious optimism as the U.S. government will now be providing mortgage capital, thereby increasing the federal debt.
