How the Canadian mortgage model could help unfreeze the housing market
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Experts suggest that adopting the Canadian mortgage model could help unfreeze the US housing market. The US housing market has experienced a decline in listings and transactions as homeowners are reluctant to sell due to the fear of losing their cheap 30-year mortgage rates. Portable mortgages, which allow homeowners to keep their low mortgage rates when they move, could potentially increase overall inventory and transaction volumes. However, implementing portable mortgages may be challenging, as it could require compensation for lenders and investors holding non-transferable mortgages and mortgage-backed securities. Additionally, homeowners may be deterred from selling if they face additional fees or a complex porting process. Portable mortgages could also increase the risk to mortgage lenders and potentially lead to higher mortgage rates. The introduction of portable mortgages would require the involvement of Fannie Mae and Freddie Mac, but currently, there are no indications that they are considering this option.

#Mortgages #HousingMarket #AffordabilityCrisis #Inventory #TransactionVolumes

https://www.businessinsider.com/portable-mortgages-interest-rates-housing-market-affordability-crisis-frozen-sellers-2024-3