Although the Obama Administration has supported a reduced role for the government in supporting the housing market, it still backs 90 percent of newly issued mortgages - "more than ever before." A new report examines the prospect of a withdrawal.
As Floyd Norris reports, the prospect for a federal government withdrawal from the mortgage market is facing long odds.
“'For the foreseeable future, there is simply not enough capacity on the balance sheets of U.S. banks to allow a reliance on depository institutions as the sole source of liquidity for the mortgage market,' stated a report on the American housing market this week, issued by a group that was filled with members of the housing establishment."
“Given the size of the market and capital constraints on lenders, the secondary market for mortgage-backed securities must continue to play a critical role in providing mortgage liquidity,” added the report, issued by a housing commission formed by the Bipartisan Policy Center, a group that was begun by former Senate majority leaders from both parties. The group thinks investors will not be willing to finance enough mortgages — particularly 30-year fixed-rate loans — without a government guarantee."
"In the end," concludes Norris, "we can have a government-dominated mortgage system, with the risks inherent in that — risks that we saw in the need to bail out Fannie and Freddie. Or we can abandon the 30-year fixed-rate mortgage, leaving homeowners at risk when rates rise, as they are in much of the world. But it is hard to see how we can have it both ways."
Read the full story: Easing U.S., Slowly, Out of Home Financing
Can Obama Cure America's Housing Headache?
A series of seemingly intractable obstacles stand in the way of transforming the housing and mortgage markets to reduce government involvement. Peter Eavis asks if a second term president is exactly the force needed to overcome such obstacles.
Freddie Mac, Fannie Mae to Back $1 Million Mortgages
Expensive housing markets are about to cross a symbolic threshold.
The 30-Year Mortgage Faces an Unprecedented Threat: Climate Change
The climate crisis will present more of an existential crisis to the traditional U.S. mortgage market than any previous financial crisis, according to some of the experts cited in the article.
Desperate measures: Advocates weigh draining Lake Powell to fill Colorado River
Draining the reservoir could reduce evaporation losses by a couple hundred thousand acre-feet.
Eastern Nebraska is running out of electricity
Data centers and electrification are straining eastern Nebraska’s grid, throttling economic development.
Malls are becoming the midtowns of the future
Mall and office park redevelopments are a generational opportunity to create new nodes of urbanity.
NYC breaks ground on anti-flooding infrastructure project
New York City's new system will reduce stormwater flows to local sewers by 90%.
One Kentucky town’s secret to affordable housing
The Smoketown Community Land Trust has already built seven affordable homes for community members.
Houston gains petal-shaped cooling infrastructure to make streets more ‘delightful’
The city has installed the pavilions along 15 blocks in Houston.
FREE Course: Walkable City 1: Why Walkability?
After describing his path towards focusing on walkability as the essence of good planning, Jeff Speck marches through his five principal reasons for making more walkable places.
Reinventing Malls: Planning Alchemy—Turning Gray Fields Into Gold
The course focuses on the opportunities and imperatives that shape reinvention of mall sites.
City of Rosemead
Rutgers University, Edward J. Bloustein School of Planning and Public Policy
One Hundred Miles
University of Michigan School for Environment and Sustainability (SEAS)
Hunter College, City University of New York (CUNY)
The Architects Foundation
City of Cambridge
Montrose County
The Pocatello Development Authority