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发帖数: 29846 | 1 Government Creating Another Housing Bubble?
By John Ligon and Mitchell Tu | May 8, 2015 | 10:02 AM
More than six years out from a government-driven housing bubble, the chief
regulator at the Federal Housing Finance Agency, Mel Watt, and the
Department of Housing and Urban Development secretary, Julian Castro are
respectively clearing a path to expand the “credit box” for government-
backed home loans.
Two recent examples: Fannie Mae recently started a program guaranteeing
loans with as little as 3 percent down payments, and, earlier this year, the
Federal Housing Administration reduced by 50 basis points the annual
mortgage insurance premiums it charges borrowers.
We have been down this path before. Using the U.S. housing finance system to
try to achieve political ends of broader and “affordable” housing goals
ultimately undermines taxpayer safety and the opportunity to build
meaningful equity for homeowners.
After all, it was only less than two decades ago that Andrew Cuomo, then-
Housing secretary under the Clinton administration, announced that Fannie
Mae and Freddie Mac, the two largest housing finance companies at that time,
would be required to buy $2.4 trillion in mortgages over the next 10 years
to provide affordable housing for about 28.1 million low- and moderate-
income families.
In the same announcement, Cuomo went on to say that “this action will
transform the lives of millions of families across our country by giving
them new opportunities to buy homes or move into apartments with rents they
can afford … it will help ease the terrible shortage of affordable housing
plaguing far too many communities.”
To be fair, political leaders in both Democrat and Republican
administrations have repeatedly called for arbitrary, vague goals aimed at
achieving a “homeownership society” and expanding “affordable housing”
even when most qualified homeowners already owned homes.
A great irony, though, is that these affordable housing initiatives have had
the exact opposite of their intended impact: These programs encourage
higher levels of debt, increased housing prices (and lower affordability) in
many markets, and greater risk within the overall housing finance system.
Affordable housing advocates tend to focus on high rental costs and
widespread slack in the first-time home purchase market as main
justification for expanded government support, but establishing new
government credit programs and expanding existing ones has repeatedly failed
to fix these problems.
To be sure, there are numerous factors weighing on the overall housing
market outlook, and certainly a main influence is the sluggish first-time
purchase market. This market, in particular for younger individuals, is
hampered by high levels of non-mortgage debt, weak employment and income
opportunities, low labor mobility (some held back by federal mortgage
modification programs), and high home prices in some metropolitan areas.
Despite any of the best stated intentions to assist individuals with “
affordable rent” or “affordable mortgages,” all of this direct and
indirect government interference in the housing finance system ultimately
biases individuals toward certain market segments and particular types of
debt instruments, increasing financial risk to homeowners and taxpayers in
the process.
John Ligon focuses his research on dynamic economic modeling of federal
public policy as a senior policy analyst at The Heritage Foundation’s
Center for Data Analysis. His policy research and writing analyzes the
economic effects of federal tax, energy, regulatory, housing and housing
finance policies.
Mitchell Tu is a member of the Young Leaders Program at The Heritage
Foundation. |
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