Do Millennials Need Fannie and Freddie?

- July 25, 2014

GSE shareholder message boards and news reports anticipate this week’s housing conference in Washington, D.C., The Big Picture: A Longer Term Perspective on Housing, hosted by Zillow.

Among several panels looking at the future of home ownership in America, is one focused on the “Millennials: Housing the Next Generation.” Will millennials have access to a 30-year fixed mortgage? Will they remain lifetime renters?

The answers to these questions, of course, are entirely dependent on what the FHFA, Congress and the courts do in the short term relative to reshaping cornerstone home finance institutions, Fannie Mae and Freddie Mac.

We need to get it right on GSE reform, to insure accessibility for the next generation. Current legislative proposals that fail to address the government’s overreach and its self-dealing are not in the long-term interest of the millennial homeowner. Reform must focus on the fundamentals of transparency and fairness if we want to ensure a robust housing market. Otherwise, the liquidity necessary for that 30-year-fixed mortgage will evaporate,; Fannie and Freddie will be a thing of the past, and ultimately, millennials will find it more difficult to own a home.

The big picture must include all market participants if we want to get housing finance reform right for the long term.