The Federal Housing Administration and President Barack Obama’s plan to jump-start the housing market has led to historically low interest rates of 3.75 percent on 30-year mortgages, but critics of the policy warn that the FHA’s easy lending may lead to a second housing-bubble, the Fiscal Times reported. [more]
New York’s Republican gubernatorial candidate, Carl Paladino, is blaming the U.S. housing bubble that triggered the global financial crisis on his Democratic opponent, Attorney General Andrew Cuomo, Reuters reported. Paladino linked the bubble to policies carried out by Cuomo when he was the secretary of housing and urban development during Bill Clinton’s second presidential term from 1997 to 2001. Paladino, a real estate developer from Buffalo, said Cuomo pressured the Federal Housing Authority and housing finance giants Fannie Mae and Freddie Mac to promote greater homeownership by reducing mortgage standards. That goal, Paladino said, was the reason banks offered millions of mortgages to unqualified buyers, who later defaulted and left the economy in shambles. Paladino will face Cuomo in the Nov. 2 election. [Reuters via CNBC]
Once the excess housing inventory now on the market has been sold, Yale
economist Robert Shiller says another housing bubble is possible.
Shiller, co-creator of the Case-Shiller Index, which measures housing
prices nationwide, said people are speculative enough about buying real
estate that a bubble could happen. Boston is one housing market where
such a bubble might take place, because the city’s property market has
not fallen as drastically as other cities’ housing markets. [more]
