WSJ Covers U.S. Housing Affordability and Mortgage Lock-In Effect

While the Trump administration floats proposals – namely Trump’s 50-year mortgage proposal, the GSE $200 billion purchase of MBS, and recent EO on institutional investors in the single-family property market – aimed at tackling housing affordability issues ahead of forthcoming midterm elections, the U.S. housing market continues to suffer from the mortgage lock-in effect. The WSJ highlights ideas that could move the needle on housing affordability: a 56% increase in the median U.S. household income, mortgage rates fall to 2.65%, or a fall in U.S. home prices by 35%. With owners locked into their low mortgage rates, home equity loan issuance ticks up as the fastest growing category of consumer credit.   

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