Adding leverage to the housing market probably isn't a net good thing.
Especially when you have a mismatch between demand for desirable housing and the available supply.
It is interesting that when you look at the US, some of our most expensive markets (housing, healthcare, education) have tight regulations on supply and federal policy response focused on subsidizing buyers (rather than addressing the structural supply problems).
> Adding leverage to the housing market probably isn't a net good thing.
The leverage part isn't necessarily a good thing as it increases house prices to some extent (how much, I don't know).
But what would be an alternative? Even if buying a house all-cash was the only choice, a house would still be very expensive because it does take a lot of real materials and labor.
If we complain today that raising a 20% down payment towards a million dollar house is very difficult, would it be any easier if that house cost (let's say) 600K but you have to raise the whole 600k up front?
I'm generally against having debt, but mortgages are a wonderful thing.
What answers do we get if "market" isn't part of the platform?
If we start with the question "how do we affordably house the most people possible", I'd think we end up with something like "the state owns the housing stock and leases it out on a long-term basis with very tight (and obviously political-third-rail) restrictions on pricing and allocation".
The comments I replied to are pretty specifically talking about government supported 30 year fixed mortgages, rather than mortgages in general. I guess I could have spelled out the context I thought was implied?
Especially when you have a mismatch between demand for desirable housing and the available supply.
It is interesting that when you look at the US, some of our most expensive markets (housing, healthcare, education) have tight regulations on supply and federal policy response focused on subsidizing buyers (rather than addressing the structural supply problems).