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Perspective. 7% is roughly the average home mortgage interest rate since 1950. That we were tempted with bizarre 3% rates for a short time should not lead us to think that it is possible to maintain for the long term. $200 billion?
If action is taken to lower mortgage rates in particular, the government would be creating an incentive for Americans to use homes as financial instruments instead of as dwellings. This would add additional values to homes, thus inflating home prices.
Prospective homeowners would get priced out of the market. Existing homeowners would get much richer. Ultimately, we’d descend deeper into a K-shaped economy.
As GB pointed out, 7% is a fairly normal mortgage rate. The era of qualitative easing was just weird. QE was meant to be a short term remedy, not long term policy. The country is still drunk on 2008-era bailouts.
Not drunk, Robert. Hung over and whining about it.
There’s no doubt that a decade of cheap mortgage money drove homes into the hands of flippers and corporate landlords.