For months, I have been writing about the Fed winding down its purchases of mortgage-backed securities and the increase in mortgage interest rates that will likely result. On Thursday I posted about the next wave of mortgage defaults coming, and the impact on home values in the areas where foreclosures have been and will continue to be most frequent.
This morning Yahoo! Real Estate posted an article that I missed from CNN.com:
Those of us inside the real estate and mortgage industries won’t find much new news here, but I haven’t seen the various influences brought together so well in a single national-press article.
Of course, debates continue about whether the Fed’s budget for continuing securities purchases should be extended,and there is new debate about another “foreclosure moratorium,” so who knows? Maybe this won’t happen — for now. Inevitably, however, these necessary market corrections will take place — now or later. In my opinion, continued artificial support will only make the correction worse when it does happen, so we should allow the market to seek its own course, with minimal external manipulation.
As I have also written frequently, Austin and Central Texas are much better positioned for this difficult period than many other areas, but a delayed and amplified national market correction will still ripple through our local/regional economy and I prefer smaller waves sooner.