Most housing advocates fiercely advocate for the preservation of the 30-year fixed-rate mortgage, but Edward Pinto says that the nation’s most popular loan type has been a major contributor to the down-market cycles that have led to massive wealth destruction. Pinto spoke with Scotsman Guide News about his preferred alternative — a shorter-term wealth-building loan.
Since the Fed announced a ¼ point increase in the Fed funds rate on December 16, 2015, the two year and ten year Treasury notes have dropped 33 basis and 54 basis points respectively. 30-year mortgage rates, which are priced off of it, have declined to 3.72%, the lowest level in 9 months and only marginally above the all-time low of 3.35% set in November 2012.
To help achieve sustainable, wealth-building homeownership opportunities for low- and middle-income Americans, our current government-backed command and control system should be replaced with market-driven antidotes.
Covering a housing or banking story today? Here’s the latest from the experts on the AEI financial services team.
Today’s housing policies are not helping anyone. Without a few common-sense policy shifts, we are only setting ourselves up for more leverage-driven house price appreciation and greater housing risk.
Using new property-level data, the authors find that the change in the land share of house value during the boom was a significant predictor of the decline in house prices during the bust, highlighting the value of focusing on land in assessing house-price risk.
The Fed of 2008 feared inflation too much and recession too little. It placed too little weight on market expectations about future conditions and on how its behavior affected those expectations. If these mistakes go unrecognized, they could well be repeated.
Fueled by historically low mortgage rates and high and growing leverage, a seller’s market has now prevailed for 40 straight months.
We often think there are only two ways to fight poverty — the government and private philanthropy. But living arrangements can be just as important.
On a year-over-year basis, first-time buyer demand increased in December.