Susan Wachter
speaker
64 appearances
1 recordings
1 series
first heard May 2021
last heard May 2021
Susan Wachter’s voice in public audio — every appearance, attributed to the second.
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Appearances
And if we say that lending, stretching to lend is okay for individuals, then that's a short step away from saying lending to stretch is good for everyone.
And that's exactly how credit bubbles fuel housing bubbles.
Absolutely.
It's extremely important in today's market to do what you can to responsibly become a homeowner and get on that homeownership ladder.
I totally agree with Lori that home ownership is the way to build wealth over the long run if you can keep your home.
However, if you stretch, and the market right now really is lending in very responsible ways.
So I am not as concerned about, quote unquote, stretching under today's market conditions.
Because in fact, lending and lenders are very responsible about the terms in which they're making lending possible.
But that's not always so, and we can't assume that that's going to be so going forward.
In fact, it's not well discussed out there, it's little known, but very shortly, just in a matter of months, there's going to be a major regime shift.
And borrowers will have the potential to be lured into what may be very dangerous loans.
So the problem isn't that individuals may stretch and, you know, individuals have to make this decision based on their own circumstances.
And the problem isn't that homeowning isn't wealth building over the long run.
It absolutely is.
The problem is if we get into a bubble mentality on two sides, bubble mentality on prices and bubble mentality on credit, where lenders, the 5,500 lenders out there, rush to undermine their lending standards to lure households who are renters to become homeowners, but only for the short run because it's not sustainable, because the loans they're making are too risky.
Well, I think if they can responsibly and with today's lending criteria, most borrowers will be using the very safe product and absolutely taking advantage of today's mortgage rates to responsibly borrow is a moment in time, particularly for millennials who are moving into that home, that stage of life where they want to start a family and
and also take advantage of the fact that they might be able to commute remotely and buy a bigger home so they can have a home office.
All of that's terrific.
And the wonderful thing is if you buy today with fixed-rate mortgages at today's low mortgage rate, you will have that fixed-rate mortgage going forward.
That is, in my work, in my publications, I, along with my co-author Richard Green, call that, we name that the American Mortgage Act.
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