Name: Why The U.S. Mortgage Market Is Broken
Uploaded: 2022-05-27T20:55:52.000Z
Duration: 12 min 58 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Mortgage rates are on the rise and they're not showing

Mortgage rates have now risen up above 5% for the

first time in a long time, and home prices have also

If you look at predictions of where mortgage rates may

be, say, two or three years from now, most people are

A mortgage typically refers to a loan used to buy a

piece of real estate for which that property serves

as collateral. Today, 63% of homeowners in America are

paying off their mortgages, according to Zillow.

Every percentage increase in a mortgage rate

significantly increases the monthly payment, especially

So there are good reasons in the broader economy for

raising rates, but this isn't good news for those

But experts say that high rates aren't the only issue

with mortgages that could hinder Americans from

Our economy has totally transformed in the last 50

If we update our system to better serve everyone in

America, it will profoundly advance us in having a more

How do mortgages make it more difficult to own a home

The price of a home often exceeds the amount of money

Mortgages exist to allow these individuals and

families to purchase a home with a small down payment

receiving a loan for the remaining balance.

We have an affordability crisis in the United States.

And I would say COVID actually revealed and

exacerbated an existing crisis, but it's only gotten

worse. So what we fundamentally have is a

supply problem, and that correlates with an

Americans today are forced to take larger loans to

The Federal Reserve Bank of Atlanta found that a

median-income household would need to spend 34.9% of

its yearly income on a  median-priced home.

For reference, households that pay more than 30% of

their monthly income for housing are considered cost

burden, according to the Department of Housing and

The cost factor is also why there is currently a large

percentage of renters  wondering if they'll even

ever be able to move from renting to owning.

And even condos and townhouses are raising in

costs across cities for half a million dollars and

up, significantly raising the down payment amount in

Saving for a down payment is one of the biggest barriers

The Center for Responsible Lending calculated that a

typical worker needs eight years to save for a 3% down

While certain programs like FHA loans allow homes to be

purchased with smaller  down payments, being able to

afford a high down payment comes with its own set of

If you come in with a lot of money down, it's easier to

It's also less expensive to get a mortgage.

Something like 40% of families in America have no

financial margin. They couldn't even afford a $400

So the idea of being able to save a 20% down payment

And again, it goes back to the fact worse than ever

right now is that food costs are going up, and

Rents are skyrocketing so much faster than incomes

right now. All of those get in the way of families being

A number of state and local institutions also offer

what's known as down payment assistance programs

There is not nearly, though, enough money for those down

The other problem has been that the programs are not

standardized and it makes it harder for lenders to use

And it also makes it harder for people to know about

Congress was considering a big package of downpayment

assistance for  first-generation homebuyers

as part of the debate over Build Back Better last year,

So that's, you know, we're still hoping that might be

Another prominent issue is the lack of small-dollar

mortgages or loans issued for less than $100,000.

Having smaller mortgages is important because by

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