The Consumers Likely Mood in November

Consumers’ moods reflect the current and anticipated domestic economy and world events.  The actual levels of employment opportunities, paychecks and cost-of-living can either free consumers to pursue their wants or constrain them to hunker down.  Threats from abroad can worry consumers about citizens’ safety and the nation’s ability to thrive.  Since consumers take their moods […]

Changing Attitudes toward Home Ownership

Recent developments in the construction industry suggest the single family housing market may be recovering.  Closer examination leaves that in question.  Unemployment in the construction industry dropped from 1,077,000 in April 2013 to 796,000 in April 2014.  Since construction’s employment trough in January 2011, it has recovered 568,000 jobs.  Despite a sizeable increase in payroll […]

Value in Manufactured Housing

Positive attitudes toward manufactured homes seem to emanate from personal experience.  Those who have not experienced manufactured homes sometimes show disdain toward descriptors such as single wide, double wide, or the most derisive term – “trailer park unit.”  Even manufactured homes from decades ago can be kept squeaky clean and well-maintained.  The grunginess of manufactured […]

Handling the Return of Housing to the Private Sector

The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) buy mortgages from banks and thrifts then securitize them for sale.  These mortgage backed securities are more attractive to investors than raw mortgages because they don’t need servicing and are easier to buy and sell.  In this way, Fannie […]

Mortgages May Become Too Onerous

For those determined and financial able, wonderful homes are available at prices considered a steal just a few years ago.   A lively housing market has traditionally helped pull our economy out of the recession ditch.  What this market lacks are able consumers with dreams of a first-time or move-up home. Although the latest recession was […]

The Public Should Not Be a Mortgage Insurance Backstop

Mortgage Insurance is a guarantee that a mortgage lender will be repaid.  Without this guarantee, most lenders would be reluctant to loan money for 15 or 30 years to anyone lacking high income, high down payment and high credit rating.  Their reluctance would show up as refusal to loan or as an uncomfortably high interest […]

The Big World of Government Subsidies — Where’s My Ride Voucher?

If you were working hard and caring for your family you might have missed some federal subsidies that parallel consumers’ spending.  The Consumer Expenditure Survey for 2011, shows an average household spent $64,000 and the top seven categories account for 87% of it.  Except for vehicle-related and entertainment, the federal government already offers subsidies in […]

Our Housing Policy Has Water in the Basement

In Washington, housing policy considers hundreds of esoteric factors viewed from the perspective of voting blocks, builders, buyers and renters, taxing authorities, mortgage lenders and taxpayers.  But from the consumer’s perspective, housing policy is fairly simple.  Consumers expect that policy will result in an affordable mortgage to be available for an owner occupied home within […]

Fannie Redux – There They Go Again

During 2004-2007, Fannie Mae and Freddie Mac stockpiled mortgages, many from the widespread practice of “liars loans” (i.e., no-documentation or low-documentation applications that skipped over validating income that could support the mortgage being sought).    Liars loans were consistent with Congress’ exhortations that the mortgage lenders bend over backwards to help low-income families attain home ownership.  […]