The current limit is 10 houses per owner... there's absolutely no reason the gov should be subsidizing real estate investors like that.<p>This should really just be limited to 1 (or maybe 2) houses per owner at one time.<p>That would create a subsidy for people to own their house (middle class rent control), allow people to move from one to another, and stop wasting tax money on subsidizing investors.
ya know how practically unlimited student loans made it so colleges could charge much higher prices? the same thing is happening with home prices. government, through the treasuries massive holdings of mortgage-backed securities, is subsidizing the real estate market, keeping homes unaffordable for recent generations. the fed purchased more MBS during covid for ‘price support’. literally keeping home prices high instead of letting them naturally fall. our housing market is going to be fucked until the fed decides to actually start selling off the MBS. and senators try to tell you that your rent is actually high because of ‘greedy landlords’.<p><a href="https://www.bloomberg.com/news/articles/2022-09-22/mortgage-investors-jump-in-after-fed-says-mbs-sales-aren-t-near" rel="nofollow">https://www.bloomberg.com/news/articles/2022-09-22/mortgage-...</a><p><a href="https://fred.stlouisfed.org/series/WSHOMCB" rel="nofollow">https://fred.stlouisfed.org/series/WSHOMCB</a><p><a href="https://www.richmondfed.org/publications/research/economic_brief/2020/eb_20-08" rel="nofollow">https://www.richmondfed.org/publications/research/economic_b...</a><p>> Over a longer term, increased mortgage credit supply may push up house price inflation and make housing less affordable.
-> The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac will rise to $1,089,300 next year in high-cost markets, such as parts of California and New York, from $970,800 this year, the Federal Housing Finance Agency said Tuesday.<p>-> For most parts of the country, loan limits will rise to $726,200 from a 2022 maximum of $647,200, said FHFA, which oversees mortgage-finance giants Fannie Mae and Freddie Mac. By law, loan limits are calculated annually using a formula that factors in average housing prices.<p>So, this isn't a large increase from year previous
Just like health care and tuition costs, government backed insurance and loans are the root cause for prices spiraling out of control.<p>"The mortgage finance market has leaned heavily on government support over the past few years. More than 90 percent of mortgages originated in 2011 were securitized by government entities using taxpayer funds to guarantee investors against default risk. This support cannot continue forever. The status quo perpetuates many of the policies that contributed to the housing bubble and consequently promotes an unstable mortgage market. In order to avoid another crisis, the government must exit mortgage finance and private capital must shoulder mortgage default risk. "<p><a href="https://reason.org/wp-content/uploads/files/study_restoring_trust_in_mbs_final.pdf" rel="nofollow">https://reason.org/wp-content/uploads/files/study_restoring_...</a>
Absurd. They need to freeze their max mortgage and keep it there for the foreseeable future to stop endless price inflation.<p>And maybe the Fed could start selling some of their almost 3T in mortgages while they’re at it.<p><a href="https://fred.stlouisfed.org/series/WSHOMCB" rel="nofollow">https://fred.stlouisfed.org/series/WSHOMCB</a>
> <i>Mortgage bankers and real-estate agents say the new limits are needed to reflect higher home prices.</i><p>Before we do this, how about we outlaw non-resident ownership of 1-3-family homes? Won't that mean prices will go/slow down, and more people will be able to afford to be homeowners? Without the government stuffing more taxpayer money into the pockets of bankers and Realtors.
This statement from the article matches my experience:<p>>However, for much of the postcrisis period, jumbo loans have been priced better than conforming loans partly because banks see them as valuable for attracting wealthy customers who they can do other business with, industry officials say.<p>My mortgage is in the ballpark where I could choose whether to get a conforming or jumbo loan. Whenever I’ve shopped for a mortgage, I never was offered a lower rate for a conforming loan. In other words, private funders are willing to finance mortgages more cheaply than the government-backed agencies. For that reason, some of the language in the article criticizing the change doesn’t make a lot of sense to me, eg:<p>>Critics of Fannie and Freddie’s large role say borrowers who can afford million-dollar mortgages should be able to finance a home without government-backed financing.<p>This rule change is presumably meaningful to bond traders because it will change the characteristics of bonds that come on the market and who can buy them. Maybe that has some downstream effect on the interest rates offered to consumers?
> Those limits are expected to jump to a baseline level of about $650,000 in most jurisdictions and to just under $1 million in high-cost markets.<p>> adding that some of his clients are unable to qualify for loans for modest-sized homes under the current limits.<p>Being unable to qualify for a loan on a $650,000-$970,800 limit makes me think you can't afford to live in that area, whatever "modest" size means.
I'm struggling to find a definition of what "backing mortgages by the government" means in practice? Does it mean private entities who buy the mortgage always get paid? If someone stops paying their mortgage, they get to keep their house?