The United States is like no other developed country when it comes to government intervention in housing finance.
Implicit and explicit subsidies, regulations and tax breaks comprise the complex housing finance system at work in the US today, with government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac playing a central role. After being placed under conservatorship by the federal government in 2008, the debate about mission of the GSEs continues, as well as whether they should be private, public or exist at all.
In this episode of the Flip Side, Barclays Head of Research Jeff Meli is joined by Dr. Deborah Lucas, Sloan Distinguished Professor of Finance at the MIT Sloan School of Management and Director of the MIT Golub Center for Finance and Policy, to discuss what role, if any, the GSEs should play in the future of the US housing finance market.
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Rising US income inequality is strongly associated with lower homeownership rates, disproportionately affecting Black residents. What should policymakers consider during the housing finance reform process?