The bailout and the housing market
TEXT OF STORY
Scott Jagow: Here’s something else to ponder. Will this bailout do anything for the housing market? Dan Grech looks at that.
Dan Grech: Home prices have been in freefall around the country, but many potential buyers have stayed out of the market. Jack McCabe runs McCabe Research, a real estate tracking firm.
Jack McCabe: There’s a lot of people that are anxious and have been waiting to buy, but they’ve wanted to buy at the bottom. And now, I think, they’re gonna see that maybe we’re getting close and maybe now is the time to get in.
McCabe says a federal bailout of the financial industry is likely to loosen tight credit markets. New buyers will be able to get loans, and current owners will be able to refinance their mortgages at better rates. But McCabe says a government rescue package will come at a hefty price.
McCabe: It doesn’t just go away. We end up ultimately paying for it, and we’re gonna pay for it to the tune of probably a trillion dollars over the next two to three generations, plus interest.
And, McCabe says, the housing crisis isn’t over just yet. In the coming months, we’re likely to see a new wave of foreclosures.
I’m Dan Grech for Marketplace.
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