Fixed Mortgages Keep U.S. Home Prices Above Other Countries

Fixed vs. variable rate mortgage dominance is why American home prices have stayed high vs. other countries during this high rate era.

St. Louis Fed research just found that U.S. home prices have faired better than other developed countries — even with higher rates.

The key reason: 90% of U.S. mortgages have fixed long-term rates.

This is different from other countries where adjustable rate mortgages are predominant.

This is a notable win for our system, where government-backed Fannie Mae and Freddie Mac play a key role in enabling the bulk of our rates to be fixed.

If Fannie and Freddie didn’t exist to provide liquidity for lenders for long-duration mortgages, lenders in the U.S. would do what lenders in other countries do and focus more heavily on adjustable rate mortgages.

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Check It Out:

– Why U.S. House Prices Stayed Resilient While Prices Fell in Other Countries