SOURCE: Freddie Mac
October 12, 2016 08:09 ET
MCLEAN, VA--(Marketwired - Oct 12, 2016) - Freddie Mac (OTCQB: FMCC) released today its October Insight questioning the pessimistic tone of the projections of leading experts of future homeownership rates. These projections provide a reasonable guide to what may occur if current age and demographic patterns in homeownership persist. They do not -- nor do they claim to -- incorporate the impact of future macroeconomic disruptions, significant policy changes, or shifts in social attitudes.
Quote: Attributed to Sean Becketti, Chief Economist, Freddie Mac.
"Twenty years in the future, today's Millennial 35-year-olds will not act exactly like today's Baby Boomer 55-year-olds. Or perhaps they will. And this is where experts from the Joint Center on Housing Studies and the Urban Institute begin to part ways in their projections of the homeownership rate.
"Both approaches project future homeownership rates by, in essence, applying some fancy arithmetic to current conditions. These approaches do not -- nor do they claim to -- incorporate future macroeconomic disruptions, significant policy changes, or shifts in social attitudes in their calculations. These types of influences ultimately will determine how accurate or off-target their projections are.
"In either case, we believe their projections may be overly pessimistic. The income and education gaps that are responsible for some of the differences may be narrowed or eliminated as the U.S. becomes a 'majority minority' country. And as these types of potential home buyers comprise a larger and larger share of the population, it will become increasingly expensive to overlook them. Profit-oriented financial institutions will be motivated to find better ways to serve them."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Today Freddie Mac is making home possible for one in four home borrowers and is the largest source of financing for multifamily housing. Additional information is available at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.
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