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Notes -
By lending money for 30 years at a fixed rate we bundle two things together in homeownership. First the purchase of a home, second a massive inflation hedge (because we lock the cost of borrowing the money for 30 years).
In most of the world you buy a home with a floating rate loan or shorter term mortgage. Which means if inflation rises, the cost of financing homes rises everywhere but in the US.
This makes home ownership an excellent investment in the US,, raising both the price of homes and the amount of home people want to buy in the US.
Most business debt is on the same floating rate terms, as non US mortgages, but at international business scale it's inexpensive to buy a derivative to make the net effect act much more like a fixed rate debt product. Freddie Mac and Fannie Mae in the US use these financial instruments to allow them to loan money on long fixed rate terms, too, effectively taking a derivative that's too big for an individual, and splitting it, but only for home loans.
If we swapped them into a pure splitting derivatives to individuals and severed the tie to owning a home, it would make financing that's currently only available to large businesses available to smaller enterprises and let people buy the inflation protection they may want with their home loan, but getting it in a separate rather than bundled transaction. Or getting a smaller more leveraged bet at a higher cost to protect other financial.
The wealth engine of homeownership isn't just the home it's also getting to finance it at a fixed rate for a long time. We should let people who would otherwise prefer to rent not need to buy a home to get long term fixed rate financing.
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