According to the New York Times, the federal government is getting ready to withdraw the support for jumbo mortgages it put in place three years ago, when the mortgage market collapsed. Upscale communities are already feeling the effects.
For the last three years, federal agencies have backed new mortgages as large as $729,750 in desirable neighborhoods in high-cost states like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans. With the economy in free fall, Congress broadened its traditionally generous support of housing to a substantial degree.
But now Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes.
The May issue of the Atlantic is packed with housing and architecture content: Frank Gehry on his creative process, a skeptical take on the limits of historic preservation, and a whole supplement on the future of home ownership. The latter was produced in cooperation with National Journal and doesn’t appear online as a discrete publication, but here are links to some of the stories in it:
Building a Nation of Homeowners
Imagining a Fannie-less, Freddie-less World
A House Is a Home: Yes, it’s a roof, and yes, it’s an investment. But it’s far more than that.
Enjoy your weekend reading!
