Friday, February 26, 2010
by Broderick Perkins
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Deadline Newsroom - Housing, a cornerstone of the nation's economy, is about to lose several layers of federal aid that went a long way toward preventing the sector from crumbling and the economy from sinking deeper into recession.
Over much of the past two years, during the greatest economic downturn since the Great Depression, government programs rendered housing more affordable through lower mortgage interest rates, home-buying incentives and a greater supply of federally insured loans. That assistance is beginning to fade, leaving behind the potential for more expensive housing in an economy that has not yet fully recovered.
The government is questioning its own plans to withdraw from the nation's housing market. During the December meeting of the Federal Reserve's Open Market Committee and Board of Directors, members voiced concern about the economy's ability to sustain growth without a strong housing sector.
"In particular, they noted the risk that improvements in the housing sector might be undercut next year as the Federal Reserve's purchases of MBS [mortgage-backed securities] wind down, the home buyer tax credits expire and foreclosures and distress sales continue," according to minutes of the meeting.
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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.
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