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Prospects Brighten for First-Time Homebuyers in Tampa



By Paul Tooher

There is finally some good news for first-time homebuyers coming out of Washington.

Federal Housing Finance Agency Director Melvin Watt, the regulator who oversees Fannie Mae and Freddie Mac, announced that he is reversing plans to reduce the agency’s role in the mortgage market.

Fannie Mae and Freddie Mac, organizations that buy loans and package them into securities, were created to increase liquidity in the housing market. But the institutions were also at the heart of the housing crisis in 2007 and received $187.5 billion in taxpayer funds to stay afloat. But the recent rebound in the housing market led to the two agencies recently recording record profits.

Today, the two companies back about two-thirds of new U.S. home loan originations, giving them a broad influence on lending and credit availability.

In remarks delivered before a Congressional committee on May 13, Watt said, “Our overriding objective is to ensure that there is broad liquidity in the housing-finance market and to do so in a way that is safe and sound.”

Earlier this year, Watt announced he was delaying a planned increase in the fee the companies charge banks to guarantee loans. The fees, which are usually passed on to borrowers by lenders, were expected to increase rates on 30-year fixed rate loans.

The move should be good news to the millions of current renters who say they want to buy a home.

According to the Zillow Housing Confidence Index, millions of current renters nationwide aspire to buy a home in the next year, suggesting strong demand among potential first-time homebuyers if market conditions are favorable.

In Tampa, 58.2 percent of renters said they aspire to buy a home while 13 percent said they expected to buy a home within a year. While the housing inventory in Tampa increased 15.4 percent in 2013, higher mortgage rates may have held back some potential buyers.

Zillow reported that its Housing Confidence Index stood at 62.6 percent in Tampa, slightly below the national average of 63.7 percent.

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[Last modified: Wednesday, June 11, 2014 8:00pm]


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