Mortgage lending bill may spark housing market buying
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Article RatingCentral Pennsylvania has not been hit as hard as the rest of the country by the burst of the housing market bubble, local realtors assert.
Kay Hock, the Greater Harrisburg Association of Realtors president, attributed that stability to the “scruples” of local realtors and mortgage lenders.
“The realtor is pivotal in helping the buyer look at the mortgage lender,” Hock said. “We’re now starting to see buyers become more comfortable with buying a home.”
She added that the recent housing market collapse “put a break on buying” but she emphasized that “real estate is local.”
“The feeling is that it’s beginning to turn around,” Hock said. “It is a buyer’s market.”
Sherri Pursel, GHAR government affairs director, said, “The normal market is close to where we are now.”
She noted that Pennsylvania ranks 28th nationwide in the number of homes foreclosed. Pursel added that she doesn’t expect the mortgage lending bill to have a “huge impact (on local foreclosures) because we’re not a big problem area.”
Data compiled by the GHAR that includes Cumberland, Perry, Dauphin and the northern tier of York and Adams counties shows that new home sales are down from 1,854 units sold in the first quarter of 2007 to 1,453 homes sold in the first quarter of 2008. A larger decline can be found in the second quarter sales numbers, which decreased by 600 homes sold in the second quarter of 2006 compared to the second quarter of 2008.
However, the median sale price of homes in the region increased in the second quarter of 2008, rising .4 percent from the second quarter of 2007 to $168,000.
Hock noted that the real estate market is cyclical, and that a clause in the new mortgage lending bill will provide a credit of up to $7,500 for first-time home buyers who purchased homes starting April 9 and extending until July 1, 2009.
“I think the first-time home buyers are going to benefit from this,” Hock said. “We would hope that would help.”
Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
“This is far more than sending a bill to the president’s desk for his signature. It’s sending a message to the American people that the Congress of the United States — despite an alternative reputation — can actually get things done, and can work together to achieve a good result,” said Sen. Christopher J. Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee.
Dodd, D-Conn., said he had summoned administration officials to his office next week to demand that the foreclosure rescue program be put into place quickly.
The legislation takes several approaches to curing the ailing housing market.
It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more than their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.
The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure. The legislation overhauls the Depression-era FHA.
The Associated Press contributed to this report.
