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the proposed answer to the housing shortage bubble is a tax credit to help first time home buyers with their down payment. sounds great, doesn't it?
gov't provides the initial payment, which goes to the bank, who finance a mortgage at an ultra low interest rate (again, because of the government), and the bank immediately sells that mortgage to the government via fannie/freddie/fed MBS buying programs.
yes, getting first time home buyers into homes is good but anyone with a brain can see that this is making the bubble worse. so many people are going to get roped into the risk of an inflated mortgage while the banks pocket the money with none of the risk. it's disgusting.
a LOT of first-time buyers got destroyed buying in 2006 when we were at the same levels. and our solution is to do it all again with some performative regulations in place while we find another way to inflate the bubble.
either allow actual price discovery in real estate by limiting investment and REITs, or commit to government-provided housing. the floating inbetween is so, so destructive. what's the point of affording a house if it's going to lead to financial ruin?
