Lesson Plan For The Future
The next Housing Crisis
Why is home ownership possible, to the degree that it is available for such a large number of people in the United States?
One reason is that the US Government subsidizes home ownership in more ways than just a tax deduction for interest paid on a personal residence, and the ability to avoid capital gain on the sale of a personal residence.
The US has an elaborate system for securing the capital required to finance the Housing Market, a system which includes Government Sponsored Enterprises, Fannie and Freddie.
After the Great Recession of 2008, which included a real estate loan crisis, rules and entities were put in place to prevent 2008 from happening all over again.
Many of those rules were not implemented, and so here we are in 2022, and we could have another financial crisis, and Fannie and Freddie could be casualties this time. They have been in Conservatorship since 2008.
In this interview, Calabria tells us that the housing market is in danger of failing.
Fannie and Freddie (Government Sponsored Enterprises or GSEs) are on the brink of insolvency.
Possible Collapse of the Housing Finance System.
Talk of a “bubble” is hyperbole. This conversation is real
Check it out on this podcast — https://lnkd.in/gADS8RaG