Is The 30yr Mortgage Irrelevant In An Unstable Employment Era?

Here’s an NYT op-ed with some useful history of the 30yr mortgage. It also discusses some ideas about flexible mortgages, where for example, a borrower can have a 30yr fixed that could have interim periods of interest-only when a borrower needs it. These ideas are not new. Robert Shiller, of Case Shiller home price index fame, has been talking about these concepts for years. But Shiller and the author of this post, a UCLA law professor, never discuss the fact that any ‘flexible’ mortgage would also have flexible pricing—meaning that rates will be higher on mortgages with more options. And let’s not forget the current regulatory wave is precisely to limit flexibility in mortgage products and pricing. So theory about a newer, better mortgage to replace the 30yr fixed is one thing. Market and regulatory reality is another.