With all the turmoil in the credit markets and loan programs disappearing overnight, the government backed mortgages have become critically important.

Today, FHA limits were raised for the Albuquerque/Rio Rancho area to $271,050. And, of course, FHA loans require only a 3% down payment. Keeping in mind that our average price is just about $220-230,000 on any given month, that will mean a lot of stability and less funds needed to close for a very big proportion of the local market.

Politics (in this case defined as ‘keeping your job’) will shortly move the Bush administration to intervene in the markets. That may normally be a non-starter for conservatives… but, hey, this is an election year. So, the Fed chairman, Ben Bernanke, is suddenly calling for bankers to reduce mortgages for those in trouble and the administration raised limits on the volume of mortgages that can be Federally insured.
None of this is necessary in the Albuquerque/Rio Rancho area particularly — except that anything that reduces the perception that the sky is falling will be welcome. More and more, I am convinced that this market – even though the local economy is sound — will not recover while every economic indicator is down.