Government Plays Valuable Role in Homeownership
by Sara Wiskerchen

Owning a home has long had government support in the U.S. because homeownership benefits individuals and families, strengthens communities, and is integral to the nation’s economy, the National Association of Realtors® said in testimony today.

NAR President-Elect Moe Veissi outlined the association’s recommendations for housing finance reform before the House Financial Services Subcommittee on International Monetary Policy and Trade. “We must be better stewards of the U.S. housing finance system if it is to thrive and effectively serve American home buyers and mortgage investors into the future,” said Veissi, broker-owner of Veissi & Associates Inc., in Miami. “Repairs to our current housing finance structure must be made, but we must be careful that changes to the system do not come at the expense of homeownership opportunities for middle- and lower income Americans.”

Toward that end, NAR supports H.R. 2413, the “Secondary Market Facility for Residential Mortgage Act of 2011,” introduced by Reps. Gary Miller, R-Calif., and Carolyn McCarthy, D-N.Y.
“H.R. 2413 offers a comprehensive strategy for reforming the secondary mortgage market and gives the federal government a continued role to ensure a consistent flow of mortgage credit in all markets and all economic conditions,” said Veissi. “Moreover, it supports the use of long-term fixed-rate mortgage products.”

Veissi testified that full privatization of the secondary mortgage market would all but eliminate products like the 30-year fixed-rate mortgage and that mortgage interest rates would be unnecessarily higher and unaffordable for many Americans, shutting otherwise qualified buyers out of the market.
“The 30-year fixed-rate mortgage is the bedrock of the U.S housing finance system, and without government support, there’s no evidence that this type of mortgage would continue to exist,” said Veissi. “Private firms’ business strategies would focus on optimizing their profits, creating mortgage products that are more aligned with the goals of their business than in the best interests of the nation’s housing policy or consumers.”

Veissi said that while the size of the government’s participation in housing finance should decrease if private capital is to return to the market and function properly, the federal government must have a continued role in the secondary mortgage market to avoid losing long-term, fixed-rate mortgage products and keep borrowing costs affordable for consumers.

“Continuing government participation in the secondary mortgage market is critical to ensuring that qualified home buyers can obtain safe and sound mortgage financing products even during market downturns, when private entities have historically pulled back,” Veissi said.

Recent reductions to the conforming loan limits by the federal government are already having an impact on mortgage liquidity according to early data from an NAR survey, which found that consumers who are now above the new lower conventional conforming loan limit are experiencing significantly higher interest rates and the need for substantially larger down payments.

	Interest Rates (%) as of October 24, 2011: 30 yr. Conv:   4.17 15 yr. Conv:   3.49  5/1 yr. adj:   3.07 Source: BankRate.com
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Finally, Time to Buy a House by JACK HOUGH The conditions are now right for homebuyers looking long term. Two key measures now suggest it's an excellent time to buy a house as a long-term residence or an income property. First, the nation's ratio of house prices to yearly rents is nearly restored to its pre-bubble average, suggesting the financial advantages of homeownership once again await buyers. Second, when ultra-low mortgage rates are taken into consideration, houses are the most affordable they've been in four decades of data. Whether buying is a better financial deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents and the cost of financing, among other factors. But the math is shifting in favor of buyers. Stock-oriented folks can think of a house's price-to-rent ratio as akin to a stock's price-to-earnings ratio, in that it compares the cost of an asset with the money it's capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else held equal. But for most house buyers, mortgage rates are a key determinant of their total costs. Rates are so low right now that houses in many markets look like bargains, even if price-to-rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or "points".) The latest rate is still less than half the average since 1971. As a result, house payments are more affordable than they've been in at least four decades of data. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near a record high in data going back to 1970. A reading of 100 would mean that a median-income family with a 20% down-payment can afford a mortgage on a median-price home. The index's historic average reading is 120. So today's buyers can afford handsome houses--but prudent ones might opt instead for moderate houses with skimpy payments.
Inventory of homes for sale continues to shrink
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	The inventory of unsold Pensacola homes is continuing to shrink as seen in the months of inventory chart above. 11.68 months is the lowest September months of inventory of homes since September 2005. This is further proof of the improving real estate market in Pensacola, Florida. The number of Active residential listings that are available through the Pensacola Association of Realtors is decreasing, as seen from July to August. This means there are fewer homes for buyers to choose from.

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	It's a great market for buyers! Now is the best time we have seen to invest in the Emerald Coast for nearly six years. This market condition does not come along often. Contact Me to find out how you can take advantage of this great investment opportunity. Take the hassle out of finding your next home, use my Free Home Search service. I get the job done and done right ! Foreclosures and Short Sales Pensacola Area Short Sales Foreclosures in the Pensacola Area
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Fun November Events Pensacola Great Gulfcoast Arts Festival November 04, 2011 - November 06, 2011 Seville Square Pensacola, FL 32502 850-434-1234 Browse more than 200 fine art and handmade craft exhibitors from around the country in Pensacola's historic Seville Square. Admission: FREE The Blue Angels Homecoming Air Show Nov 11, 2011 - Nov 12, 2011 Naval Air Station Pensacola, Florida. National Museum of Naval Aviation, 1750 Radford Blvd, Pensacola, FL 32508 Website: www.blueangels.navy.mil/schedules.htm Fort Walton Beach Greater Gulf Coast Beer Fest November 12, 2011 Join us for the second annual Greater Gulf Coast Beer Fest at Uptown Station in Ft Walton Beach, FL Over 200 craft and import beers from around the world. Celebrity brewmasters, breweries, food, music & give-aways. Tickets are $25 in advance, $30 day of event. Additional Information, Website Perdido Key 27th Annual Frank Brown Songwriters Festival Nov 10, 2011 - Nov 20, 2011 Various venues, check website for complete details. Flora-Bama Lounge & Oyster Bar, 17401 Perdido Key Drive, Pensacola, FL 32507

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