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Daily Real Estate News  |  September 10, 2008  |   Will Fannie and Freddie Bailout Make a Difference?
Will the government takeover of Fannie Mae and Freddie Mac make a substantial difference in the housing market?

"It's enough to turn the starter, but I don't know that it keeps the engine running," says A.W. Pickel, chief executive of LeaderOne Financial Corp.

In just one day, the average 30-year mortgage rate fell by half a percentage point to about 6 percent. Another half a percentage point drop is widely expected. That would bring home mortgage interest rates back to levels last seen in January.

The industry rule of thumb is that sales rise 10 percent for every 1 percent drop in mortgage rates, says Tim Eller, CEO of Centex Corp., the No. 3 U.S. home builder.

This weekend will be the first time real estate practitioners have open houses after the mortgage rate cut. Some professionals have high hopes.

"I think half a point gets the people out looking. One point makes them commit," says Phil Immel, broker associate with Prudential California Realty-Orange County and founder of RealEstateGuru.com.

Source: Reuters News, Lynn Adler (09/09/2008)

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