The government is pushing for loosened rules governing down payments. The idea that a borrower should pay 20% down is anathema. What about 10%? Too high.
I think 3% will satisfy legislators. Maybe 5%. But not much over 5%. They want another bubble.
Without government subsidies, the housing market would be very different. But voters want the subsidies. Legislators want to keep voters happy.
This policy of low down payments led to a disaster in 2008. But that does not faze Congress. Bubbles are popular. They always pop. Then politicians pass laws that start the process over again. “This will not create a new bubble. Trust us.”
Americans trusted them before. They trusted Greenspan, who said it was not a bubble. They will trust Congress again.
This is another reason to take advantage of today’s low mortgage rates.