Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

How to Avoid the Next Housing Bubble

Notify me of new replies via email
  • Chad Mestler | | 01 Feb 2013, 01:17 PM Agree 0
    Getting the government out of the mortgage business is how to prevent housing bubbles. Government subsidies in the form of below market interest rates, and high mortgage to value artificially inflates housing prices. Consider, GSEs now hold more than 50% of the distressed inventory. Government subsidized capitalism is poison to a natural economic system. The industry now needs a major dose of methadone as a result of the massive amount of housing stimulus we have become reliant and over the past 20 years.
  • William Matz | | 02 Feb 2013, 01:35 PM Agree 0
    As much as it may pain real estate professionals to admit it, Chad is correct. Anything that is subsidized by the gov't [e.g. healthcare, education, housing, etc.] sees disproportionately high price growth. And just as we have seen the housing crash, there are now predictions of massive defaults in education mortgages and major disruptions in healthcare. It should be noted that Germany, the strongest economy in Europe, has a home ownership rate of @43%. Part of the higher US rate is clearly due to luring into ownership folks who should have remained renters.
Post a reply