Good Riddance 30-Year Fixed Mortgage? Not So Fast…

Peter
J. Wallison’s recent article in the Wall Street Journal on government support
of the residential housing market (“What’s So Special About the 30-Year
Mortgage?
“) is an interesting academic exercise but it has no relevance to
the reality of the U.S. housing market.

While
it is true that, for many years over the life of a 30-year loan, most of the
payments go to interest and not principle, if we were to remove the tax
deductibility of the interest paid
(regardless of the term of amortization) as
some have suggested, we would remove another 33% of value from the American homeowner,
based on the marginal rate at the Federal level of 28% and the average State
and local tax rate of 5%.

 

…(read more)

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Mortgage Rates Hit Record Lows; 15-Year Fixed Below 3%

Average fixed mortgage rates again stuck historic lows over the past week, a decline that put the 30-year fixed mortgage rate at an all-time trough for the fifth straight week.

30-year mortgage rate rises above record low

The 30-year fixed mortgage rate rose for the first time in four weeks, relinquishing its all-time record low amid news that the housing market is showing some signs of improvement.