From my Daily Realtor news feed:
Mortgage rates declined Tuesday after the Federal Reserve said it would spend $600 billion to support the mortgage securities market.
Rates fell to 4 7/8 percent, a 1 1/8 percentage point decline. David Beadle, president of BestInfo, said it was the sharpest one-day decline since 1988.
“I hope that the effect is that it brings more investors home to investing in housing,” said Alfred DelliBovi, president of the Federal Home Loan Bank of New York. “[Investors] have had a sense in the markets that anything connected with a mortgage is bad” even though most people pay their home loans, he said.
This is great news for buyers, but I have a news flash for Albert, who says “I hope that the effect is that it brings more investors home to investing in housing”.
Albert – NEWS FLASH – There are plenty of investors ready to buy additional rental properties, but we can’t obtain new loans because the Feds have us capped at 4 loans max.
The 4 loan cap means that investors like me and Sylvia, who have bought and/or sold real estate in Austin every year since 1994 and have never missed a paymemt on anything, ever, cannot qualify to buy an additional investment property because we have “too many real estate loans” already and therefore the government deems us “risky” borrowers. This would be funny if it were not so stupid.
And many of our investors are in the same position. What the government has done by dropping the loan cap from 10 to 4 earlier this year is to eliminate the best buyer pool there is – experienced investors who have a long term track record of owning real estate and making on-time payments.
Give us loan rates below 5%, and maybe do something else creative such as waiving of the capital gains if we keep the property 5 years or longer, and I’ll go out and buy 3 or 4 additional investment properties in Austin before the end of the year.
Hopefully someone in Washington wakes up soon. Removing the 4 loan cap combined with sub 5% interest rates will bring investors out into the market but idiots who think of these rules have us all sitting on the sideline.