Conor Dougherty

And it makes it really, really hard to buy a house.

FDR is seen as the person who brought the government into the housing market in a big way.

After the Great Depression, government does a bunch of different things.

One is they really try to make standard this idea of what's called an amortizable mortgage, which means you have one payment and you do your principal and interest in one easy payment.

The other thing is they start encouraging longer-term mortgages.

Now, longer-term mortgages are going to be more affordable because the monthly payment is going to be much less if you can extend it over, say, 30 years instead of 10 years.

The problem is banks don't really want to do long mortgages.

They don't like it because if interest rates go up, they have to pay more money to the people who put money in their bank, but they're still getting the same amount of money from the people who've borrowed money for the home.

So the government says, okay, well, we'll help you with that problem by covering you if these loans start to go belly up.

Mm-hmm.

Now, exactly how they do this is this very, very complicated mortgage system that we now have.

But the whole point of all of this is to make it easier for more people to buy homes and for that home to be sort of wrapped around one easy payment.

That system is why we have a huge homeownership rate.

About two-thirds of Americans own their home.

That number would be way lower without their 30-year fixed mortgage.

And it's just an incredible deal because the interest rate is fixed.

Your monthly loan payment is frozen.

Even if inflation picks up,

On top of that, if rates go way down, you can refinance.

Right.