Twin Cities Homebuyers React to US Credit Downgrade

MINNEAPOLIS (WCCO) -- With the news of plunging U.S. Stocks and the drop in America's credit rating, homebuyers in the Twin Cities are in save mode.

NewsRadio 830 WCCO's Edgar Linares Reports

"You don't know what's going to happen, it's frustrating and stressful at the same time," said Todd Legut, a homebuyer.

Legut says with the market dropping he's decided to back off a bit. He's been on the hunt for a new home for six weeks. The buyer of his previous home asked him to move out quickly, and he's now renting a twin home.

"All you hear is of these deals out there, but I'm not finding these great deals," Legut said.

Legut looked at foreclosed homes and short sales, but he says those homes are still too expensive.

For Aimee Ranallo and her husband, the home buying process is coming to an end. They're about to close on a home in Maple Grove. They've been paying close attention to the fluctuating economy and the U.S. credit rating drop.

"I was going to get a car, but absolutely not now," Aimee Ranallo said.

Ranallo and her husband are first-time homebuyers and wanted to make sure they could afford their new home. They've been budgeting for the last three months until they close on their home in October.

"We needed the time to figure out how much things were going to be, if we could afford this," Ranallo said. "There's still time to back out if we have to."

Interest rates for homes are low, and Legut is looking to move quickly. However, he's holding back now. The credit ratings for Fannie Mae and Freddie Mac were also downgraded, and experts say that will lead to higher interest rates on home loans.

"With the market dropping the way it is, I'm not going to do anything until it stabilizes," Legut said.