Should we increase the Fannie & Freddie Mac limits?

NAR Urges Higher Loan Limits

NAR has called on Congress and the Bush administration to increase the loan limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to $625,000. National Association of REALTORS President Dick Gaylord noted, "This change will permit more families to enter the housing market by making more mortgages available with lower interest rates. Increased home sales will lower inventories and immediately start stabilizing the housing market and the economy."

[SOURCE: NAR]

 With the median home prices having made a significant increase in the last five years or so in so many areas of the country (last few months with standing); I believe this is the right and just move on the part of the Bush administration and other powers to be. Where as it is not as big of an issue in the Memphis area; those of you who live in D.C. or Alexandria, L.A., New York, even Portland and so forth can appreciate how a $600,000 home is not a huge lavishing estate but rather a modest comfortable home with in a decent school district.

This would also, as stated above help (even a little help, helps) the current inventory glut by providing a source for loans with Fannie Mae guidelines. A large portion of buyers who were purchasing above the current price levels were using the sub-prime or relaxed lending loans that have recently all but dried up because there were no Fannie Mae options available.

Do you have thoughts or questions on the subject? Feel free to respond with your comments. 

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