In This Housing Boom, Mortgages Are for Losers
To boost entry-level homeownership for lower-income buyers, the government needs to make the market less appealing to the cash-rich Wall Street investors who have taken over.
Wall Street is the problem, not mortgages.
Source: Bloomberg
Scarce supply and bidding wars have kept many entry level homebuyers out of the market for years. The government is trying to address this by ensuring a higher percentage of federal-backed mortgages go to low-income households, or for houses in communities with a large share of minorities.
Expanding mortgage availability is a worthwhile goal, but in a housing market now dominated by cash offers from big investors, it's unlikely to move the needle. A more effective approach would start with the homestead exemption.