The guest commentary below was written by Christopher Whalen. It was originally posted on The Institutional Risk Analyst.
Last week we posted a snippet from Rob Chrisman’s housing finance blog about former Fed Chair Janet’s Yellen being "puzzled" due to the lack of home ownership by Millennials. The ensuing reaction was an order of magnitude above our normal level of discourse, leading us to think that there is a raw nerve among Americans when it comes to home prices.
Here is the Chrisman excerpt:
I found this note sent to me a few years ago by John Hudson by Roy DeLoach of the DC Strategies Group titled, "Hang-in there, Millennials - The New Sub-Prime Mortgage Wave Is Coming." Roy is a former CEO of the National Association of Mortgage Brokers.
"Hang in there, Millennials and all you other wanna-be first-time buyers still residing in Mom's basement. The Federal Reserve, Fannie Mae and Freddie Mac could soon be riding to your rescue. Well, not just your rescue, but perhaps more importantly, to save the economy, too. Which is the real reason they want you to take your 'rightful' place in the chain of life known far and wide as the 'Housing Ladder.'
"Actually, Fed Chairwoman Janet Yellen is perplexed 'why so many Millennials choose to rent' rather than purchase a home. There was a collective chuckle in the room when I heard her make that statement at a recent House Financial Services Committee hearing. I only pray there are some in Washington who are not only not as confused as the Fed Chair, but also are seeing the very same statistics I am looking at and coming up...