The Morning Report
Get the news and information you need to take on the day.
The Senate passed the stimulus package last night, including the one-year increase on the conforming loan limit, from $417,000 to a potential ceiling of $729,750. (Earlier this week, Mayor Jerry Sanders wrote the Senate majority leader, Harry Reid, expressing his support of that particular detail.)
Here’s a take from reader J on the plan:
It would not be unreasonable to raise the conforming loan amount to $500k from $417k. But to raise it above $600k or $700k is ridiculous. FHA, and other govt agencies are supposed to be helping 1st time or entry level buyers. My home and my sisters’ home and inlaws homes are all currently evaluated at below $400k. Why should I pay tax dollars to subsidize someone else buying a nicer home than mine? It only serves to perpetuate the housing bubble, and to maintain the overpriced status quo in the sunbelt states.
Reader BC reacted this morning to the mayor’s endorsement of the raised jumbo cap (echoing Scott Lewis‘s perspective last week and Rich Toscano’s bailout watch).
So somebody please tell me how raising the conforming loan limits from $417K to $700K will help anyone except the super rich. Perhaps Mayor Sanders is planning to raise the salaries of city employees to the necessary $110K – $175K / year in order to qualify for these higher conforming home loans. And we all know what that means for the rest of us San Diego taxpayers (hint – continued apartment living).
If Sanders really supports homeownership as claimed in the story, he would be coming up with solutions that reduce house prices to a level where the average household can actually afford to buy a home.