U.S. housing won't crash because it's getting a bailout

"The federal government will come to the rescue once again. With affordability ridiculously low for house hunters, you'll see numerous attempts this year to save housing from the usual free-market fix for a terribly overvalued market: falling prices. Ponder the current price pain by looking back at monthly payments and how they soared in recent years. My trusty spreadsheet combined monthly median prices, as calculated by Attom, and mortgage rates from Freddie Mac assuming a 20% down payment."

"Nationally, the monthly payment in October was $2,251 for the $360,000 median-priced home. That's up just 2% in a year. However, this burden rose 99% over five years and amid pandemic-era economic contractions. It's up 154% in a decade, when the recovery from Great Recession was in full swing. And it's 198% higher since 2010. Yes, payments have basically tripled since just after the last bubble burst. Who got a raise that size?"

"To avoid the current high risk of a market crash, housing will be propped up with various tricks. New loans: We already saw the idea of a 50-year mortgage floated. While it would be just another tool for house hunters trying to make their finances meet pricing realities, the industry wanted more lucrative fixes. Cheaper loans: Two federal mortgage-buying agencies are now nudging mortgage rates lower with a technical twist: Holding, not reselling, certain home loans they guarantee."

Federal action will intervene in housing markets in 2026 to prevent steep price declines amid severe affordability problems. Monthly mortgage payments have jumped dramatically: the national median payment reached $2,251 for a $360,000 home in October, rising 2% in a year, 99% over five years, 154% over a decade and 198% since 2010. California payments reached $4,597 for a $735,000 median home, with similar multi-year increases. Policy and industry tools will prop up prices, including very long-term mortgages, government-held loans that lower apparent mortgage rates, and direct cash or financial inducements to buyers and sellers.

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