However, according to CNBC’s Diana Olick the plan will only be for people buying new homes or existing homes. In other words, homeowners looking to refinance will not be eligible.
That's because the intention of the plan is to reduce housing inventory. (The large supply of homes on the market right now are driving down prices.)
And Olick has another concern. She says it’s widely believed that the government didn’t want the information released yet, and as a result potential homebuyers could refrain from making their purchase.
It stands to reason. Who would lock in a mortgage at 5 ½% today when they can wait and get 4 ½%, tomorrow?
Strategy Session with the Fast Money traders
The housing market is what got us into the problem and it’s what will lead us out, counsels Pete Najarian. And it could bode well for commodities because things like copper and steel go into making houses. If you’re looking for a trade, look at the steel names, he says.
There are people waiting on the sidelines to buy a house so I like the plan, adds Guy Adami. And 4 ½ mortgage rates could really spark demand.
I don’t really feel better than I did a week ago, counters Karen Finerman. Anytime the government comes out with a plan the market initially goes higher but then it settles lower. And this does nothing for homebuilders with too much debt on the balance sheet. If you want to make a complete leap of faith, look at US Gyp she adds . But it’s risky.
Sell the news, exclaims Jeff Macke. We change the rules every single day! Right now you can’t make investors buy stocks because government policies change so much.
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Trader disclosure: On Dec. 3rd, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MGM), (MSFT), (UUP), (WMT), (MCD); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman's Firm Owns (PM), (MO), (IBB), (PPH), (CSCO), (MSFT); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (BBT), (COF), (USO); Finerman's Firm Owns (DNA) And (DNA) Calls; Najarian Owns (NUE); Najarian Owns (UYG) Calls; Najarian Owns (SNDK) Calls
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