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Old 11-12-2013, 05:39 PM   #111
pricejj's Avatar

Join Date: Aug 2009
Posts: 22,319

The U.S. Federal Government, knowing that new-home building has been a significant component of a growing economy has been subsidizing the mortgage industry, and inflating housing rates for quite sometime.

Some of the tools used:
1. Fannie Mae and Freddie Mac
3. Mortgage interest tax deduction
4. Interest rate manipulation from the FED
5. Subprime lending mandates
6. First Time Homebuyers Tax Credit
7. Creation of FHA (3.5% down requirement)
8. Purchasing Trillions of dollars of mortgage-backed securities

Now, American taxpayers are on the hook for >$5T (debt on Fannie and Freddie balance sheet).

Federal government intervention has caused MASSIVE inflation and speculation in the housing sector, and is precisely what caused the crash in '06...and the current run-up in prices.
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