Fannie Mae Inflating Home Prices?

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Over the last 18 months the Phoenix valley has seen an increase in home prices.  One cause for the increase is that we are experiencing a lower inventory of homes to sell.  Low inventory + High demand = higher prices. 

This increase has help many homeowners gain back the equity in their home. Now many homeowners have chosen to sell their home and purchase another because interest rates are still at historic lows. 

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What is not good about the rising home prices according to Channel 12 news in Phoenix AZ, is that Fannie Mae has been over inflating the home prices on short sales.

Watch this news story from our local NBC station about Fannie Mae inflating home prices.


According to this story, it appears that Fannie Mae at times may be countering the buyers offer to purchase the home as much as 25% over market value.

When homes are inflated to this extreme, this causes the home buyer who is financing the home to no longer be able to qualify for the new inflated price. Plus most buyers, including cash buyers are canceling the purchase simply because they know they are paying more for a home than what it is worth.  In addition, the homeowner is no longer able to short sale their home due to the inflated price and now has to go thru a foreclosure.

 For more information on this issue or any Real Estate related question that you may have call us at 623-486-5700.


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RE/MAX Renaissance Realty

9059 W Lake Pleasant Pkwy Ste B200, Peoria, AZ 85382 | Phone:(623) 486-5700

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