Housing
Connecting the dots: Why housing finance is rigged
https://www.aei.org/publication/connecting-the-dots-why-housing-finance-is-rigged/
According to S&P/Case-Shiller, house prices are now over 30% higher than four years ago.
Who else benefits from higher prices? Realtors. That is why the NAR, whose sole mission is to “help its members become more profitable and successful,” keeps pushing for even more demand against a constrained supply, which will ultimately drive prices even higher and make commission checks even fatter.
Who benefits from more demand? The Federal Housing Administration (FHA) - which is in the business of providing loans to primarily lower-income borrowers - was able to overcome its chronic funding shortfall by expanding demand through a mortgage premium cut that not only drew in new borrowers by providing them with more leverage, but also poached from other agencies.
This symbiotic relationship between the NAR and FHA, all cloaked in concerns about affordability, works however to the detriment of the little guy. By applying even more leverage, home prices rise faster than incomes
https://www.aei.org/publication/connecting-the-dots-why-housing-finance-is-rigged/
According to S&P/Case-Shiller, house prices are now over 30% higher than four years ago.
Who else benefits from higher prices? Realtors. That is why the NAR, whose sole mission is to “help its members become more profitable and successful,” keeps pushing for even more demand against a constrained supply, which will ultimately drive prices even higher and make commission checks even fatter.
Who benefits from more demand? The Federal Housing Administration (FHA) - which is in the business of providing loans to primarily lower-income borrowers - was able to overcome its chronic funding shortfall by expanding demand through a mortgage premium cut that not only drew in new borrowers by providing them with more leverage, but also poached from other agencies.
This symbiotic relationship between the NAR and FHA, all cloaked in concerns about affordability, works however to the detriment of the little guy. By applying even more leverage, home prices rise faster than incomes