By now you've probably heard most of what you'd ever want to know about Fannie Mae
You likely realize that the takeover -- call it a bailout if you'd like -- won't do much to move our housing market from intensive care to a rehabilitation unit. It's just not an elixir that will halt the slide in housing prices and instantaneously trim the bloated inventory of homes on the market. In fact, as I've told my Foolish friends in the past, my belief is that the number of homes sporting "for sale" signs is effectively dwarfed by an underground contingent whose owners would love to list them, but currently fall into the "What's the use?" camp.
The glut won't shrink quickly, regardless of who is pulling the strings at Fan and Fred. Because the takeover won't really address the other big part of the housing quagmire -- foreclosures -- it would be foolhardy to assume that the weekend's action will slam the brakes on housing's price slide. Until the glut begins to contract noticeably, most of our homes likely will be worth less at year's end than they'd fetch today.
The takeover isn't totally without value, however. It will put a firmer foundation under mortgage lending and stave off an economic implosion, albeit by dipping liberally into our tax dollars. That foundation should ultimately benefit the lending likes of Washington Mutual
And housing will recover -- it has to -- eventually. And I'm not trying to completely warn you off of slowly and sensibly building positions in the strongest homebuilders.
The operative words there are "slowly" and "strongest." In my mind they translate to worthwhile look-sees at luxury builder Toll Brothers
Toll Brothers is accorded a single star by Motley Fool CAPS players. With the company's shares up 20% on the year, would you vote otherwise?
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