Housing Bailout is here

As one will always tries to stay on top of my local Outer Banks Real Estate market, it is important to pay attention to what is happening nationally.  This week a majoy announcement was made on the national scale.  It is the bailout of government sponsored entities Fannie Mae and Freddie Mac.  The bailout of both these institutions had been rumored for some time.  The continued decline of US housing prices and the increase in foreclosures made this a more imminent problem.

     The big questions now are what exactly the bailout will end up costing taxpayers.  Estimates have ranged from 5 to 100 billion.  The hope is the bailout will ensure some stability in national and world markets.  The move lent some strength to the US dollar but now services like Reuters are reporting investor confidence in the move is hitting a low. 

     Maybe the lone positive sign from the entire bailout is that 30 year interest rates are expected to fall.  Some analyasts say rates could go as low as 5.65%.  That would probably provide an injection of buying in the US real estate market.  This drop in interest rates will continue to make the Outer Banks especially attractive, to investors.  The lower interest rates will make monthly payments lower and thus vacation homes more attractive.