Cheaper Mortgages Won’t Solve the US Housing Crisis by Ross Levine & Amit Seru
For decades, federal housing policy has favored cheaper financing over expanding the housing supply, despite evidence that expanding mortgage credit increases borrowing and house prices. The bipartisan 21st Century ROAD to Housing Act marks an important shift by emphasizing measures that make it easier to build more homes.
STANFORD—For half a century, US policymakers have mistaken mortgage policy for housing policy. Rather than making homes more affordable, their efforts to make mortgages cheaper have mostly produced more borrowing.
