Mark Zandi Quotes
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Too-easy credit and millions of bad loans made during the U.S. housing bubble paved the way for the financial calamity and Great Recession that followed. Today, by contrast, credit is too tight. Mortgage loans are particularly hard to get, creating a problem for the housing market and the broader economy.
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It is time to move on. House prices won't rise and the economy won't fully engage until more distressed properties are resolved and put back into ordinary use.
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The extension and expansion of the payroll tax holidays for workers would be number one on my list and key to avoiding recession.
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In a normal time, I don't think economic policy makes a large difference one way or another. But in times of crisis it makes all the difference in the world.
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Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.
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Indeed, the FHA was born out of the Great Depression, which was also caused in significant part by a foreclosure crisis. Mortgages in the early 1930s were mostly three- to five-year 'bullet' loans, which did not amortize and were due in full at maturity.
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Defaulting on the nation's debt would be cataclysmic. The U.S. Treasury's Aaa rating is the one constant in the world's financial system. When times are bad anywhere on the planet, global investors flock to Treasury bonds because they know they will get their money back.
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Potential home buyers have a two-step decision process. First, they determine whether they can afford to make a purchase - does their income safely cover their mortgage payment? Then they determine whether owning is a better financial choice than renting - are the costs of owning a home lower than the cost of renting it?
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There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren't among them.
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It is easy to be pessimistic. These are extraordinarily difficult times, and the collective psyche is teetering. But we are closer to righting the wrongs that got us into this economic mess than most of us believe.
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Past experience with fiscal austerity at home and overseas strongly suggests that it is best for the economy's long-run performance to restrain government spending rather than raise taxes.
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There are different flavors of recession. You can get into some pretty dark scenarios pretty quickly.
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They called me the sexiest economist in America, and that was years ago, when I had hair and body mass and my teeth were shiny.
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President Obama's reelection started the countdown for lawmakers to address the fiscal cliff and the statutory debt limit. Unless the President and House Republicans can agree on changes to current law, the U.S. economy will be in recession by spring.
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Yes. I don't think it would be appropriate at this point to raise taxes on anyone, certainly not in 2011.
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Investor demand for distressed property has been healthy, as rents rise to levels that can cover investors' costs while they wait for properties to appreciate. Giving investors a small tax break should further juice up demand, supporting prices for distressed homes and the market in general.
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Now, I do think when we move into 2012 and '13 when, presumably, the economy is on firmer ground, I would allow the tax rates for upper-income individuals to revert back to where they were before the cuts in the 1990s. I think at that point it makes perfect sense.
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The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.
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The biggest culprits in the housing fiasco came from the private sector, and more specifically from a mortgage industry that was out of control.
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The most important point is, in a time of crisis, there is no way out but for the government to be bold and aggressive.
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In a forbearance, the homeowner pays interest and principal on a smaller mortgage, at least for a time, but still owes the full amount. The lower monthly payment helps with affordability, giving stressed homeowners a break.
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It has become fashionable to rail against government intervention in the economy, and the FHA is a favorite example by those trying to show the government's overreach. In reality, the FHA shows how government action during the Great Recession forestalled a much worse economic fate.
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We need to get rid of the debt ceiling law. It's anachronistic and it's a problem.
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We're getting job creation in healthcare and educational services. We've been getting that all along. It's demographically driven, it's funded by the government, and that's held up.