If 4.5% money can stop home values from plummeting further, it will have been the biggest and best bailout so far.
Since the Saver mortgage will practically eliminate the upfront mortgage insurance premium — it will be reduced to 0.01 percent of the home value, from 2 percent — the loan may become more attractive to people with more modest cash needs or who need the money for a shorter time.
The state allows a couple to protect $150,000 in home value from liquidation.
Add in the wealth effect from rising home values and the boost to spending from mortgage-equity withdrawal, and housing accounted for an astonishing 50% of GDP growth in the first half of this year, reckons David Rosenberg, chief economist at Merrill Lynch.
According to Zillow, the real estate Web site, median home values in the first quarter of 2008 declined 7.7percentt from the same quarter a year earlier.
There is also a stamp duty, which is 1 percent of the sales price for homes valued from $205,000 to $409,000 33 percent for homes valued from $409,000 to $818,000; and 4 percent for homes valued higher than $818,000.
This is a decline of 4.89percentt from 1990, but the state's other large cities experienced steep declines in home values, ranging from 38percentto45percentcent.
Real estate agents also typically collect a fee of about 3 percent of the home's value from the seller, Mr. Voet said.
Home values rose slightly in the second quarter from a year ago, the first annual increase in five years, Zillow, the real estate Web site, reports.
Two census tracts within seven miles of Roslyn Heights -- including communities like Old Westbury and Brookville -- notched the highest percentage increases in home values on Long Island from 1990 to 2000, according to census figures.
