Mortgages won't fix this

Published: Monday, February 2, 2026 at 12:01 pm

Housing Market Faces Uncertainty Amidst Policy Proposals and Declining Sales

The American housing market is experiencing a period of volatility, marked by fluctuating mortgage rates, ambitious policy proposals, and a significant drop in pending home sales. Prospective homebuyers are navigating a complex landscape where the government is actively exploring measures to improve homeownership accessibility.

In December, pending home sales plummeted by 9.3%, the largest monthly decline since April 2020. This downturn, impacting all regions of the country, has dampened cautious optimism among economists who had observed some improvements in housing activity. The National Association of Realtors (NAR) chief economist acknowledged the uncertainty, noting that it's unclear whether this decline is a temporary setback or the beginning of a more significant trend.

Simultaneously, the President has unveiled housing agenda proposals, including 50-year mortgages and portable mortgages. While these ideas aim to make homeownership more attainable, economists caution that they could have unintended consequences. For example, a 50-year mortgage could lead to significantly higher total interest payments, while portable mortgages might exacerbate the gap between existing homeowners and first-time buyers. Additionally, a proposed ban on institutional investors, while seemingly appealing, may not significantly impact the market as these investors own a relatively small percentage of single-family rentals.

Economists emphasize that the core issue is a housing shortage, with millions of additional units needed to meet demand. They express skepticism towards mortgage-focused proposals, arguing that they risk inflating demand without addressing the fundamental lack of supply. The consensus is that the path to affordable housing lies in increasing the housing supply through construction, which requires addressing zoning laws and permitting processes at the state and local levels.

BNN's Perspective: The current situation highlights the complexities of the housing market. While policy initiatives can offer short-term relief, the long-term solution lies in addressing the underlying supply-demand imbalance. A balanced approach that combines responsible financial policies with efforts to increase housing construction is crucial for achieving sustainable affordability.

Keywords: housing market, mortgage rates, home sales, housing shortage, affordability, pending home sales, economists, policy proposals, 50-year mortgage, portable mortgages, institutional investors, zoning laws, construction, housing supply, real estate

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