C.A.R. to release executive report, “The Future of Housing Finance: Economic and Policy Insights,” featuring analysis from top economists and finance experts
LOS ANGELES (Nov. 25) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently convened a high-level roundtable featuring experts at the top of their field in economics and finance to discuss real estate market conditions, mortgage finance, housing policy, and the financial recovery. The substantive conversation with these academics stems from C.A.R.’s new Thought Leadership program, and analysis of the event is featured in the executive report titled, “The Future of Housing Finance: Economic and Policy Insights.”
The panelists at this private roundtable included professors Janice Eberly, Edward Leamer, Richard Green, and David Min. C.A.R. CEO Joel Singer moderated the panel discussion. The report highlights the insights of these experts on the most pressing issues facing the housing industry.
Among the analysis shared by the panelists include the following:
• The Future of the 30-Year Mortgage: Housing finance’s future under the 30-year mortgage may be a function of politics rather than economics, as the sway of voters may suggest the 30-year fixed-rate mortgage is a product that’s here to stay. The political pressure and conventional wisdom after decades of familiarity support the tenability of the 30-year mortgage. The country’s mentality about the mortgage market may be informed by voters’ short memories, with the 2008-2009 downturn being forgotten in the course of a few years.
• Finance Reform Requires Clarity: A great deal of uncertainty remains about the future of America’s housing finance system, and this lack of certainty about the government’s role has impacted credit availability and access to low interest rates. As the American public and its political leaders consider various legislative proposals, Americans must consider the value of a consumer-friendly loan, and by extension, the government backstop it requires. Discussions about finance reform thus far have struggled to differentiate the government’s role with respect to a backstop versus a subsidy, as a government role has been necessary to prevent onerous mortgage terms from the pre-New Deal era.
• Household Formation Falling Behind: While the country is indeed experiencing a housing recovery in terms of price and volume of building, housing starts are way below normal. The lack of a solid economic recovery has hindered household formation, which came to a crashing halt around 2007. Overall, there are about 3 million missing households.
Janice Eberly is a professor of finance and former chair of the Finance Department at Northwestern University. Professor Eberly served as the assistant secretary for Economic Policy at the U.S. Treasury from 2011 to 2013 after being confirmed by the U.S. Senate, and in that capacity she was the chief economist at the Treasury. She led the Office of Economic Policy in analysis of the U.S. and global economies and financial markets and development of policy recommendations.
Edward Leamer serves as director of the UCLA Anderson Forecast and is a professor of Management, Economics, and Statistics at UCLA.
Richard K. Green, Ph.D., is the director of the USC Lusk Center for Real Estate. He holds the Lusk Chair in Real Estate and is a professor in the USC Sol Price School of Public Policy and the Marshall School of Business.
David Min is a professor of law at the University of California, Irvine. He is a nationally recognized expert on financial markets regulation, and was formerly a staff attorney at the Securities and Exchange Commission. Most recently he was the associate director for Financial Markets Policy at the Center for American Progress, and his work involved overseeing the Mortgage Finance Working Group.
Under its new Thought Leadership program, C.A.R. is committed to promoting such intellectual engagement and cultivating a better understanding of the forces shaping the real estate industry. Furthermore, the upcoming report reflects C.A.R’s commitment to enhancing its position as a leading housing organization through resource-rich outcomes.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.