We’ve ridden a bubble in housing, and prices went far higher than they should have. The bubble has burst, and they’re coming back down. Eventually, housing prices will reach a place where the millions of people who are renting today are going to want to buy a house. The importance of what we’re trying to do here is to make sure that when prices bottom out, there’s a mortgage market, that there’s a banking system in place to actually support that kind of purchasing activity. The role that Freddie and Fannie have played as we ride this bubble down is to turn it around, and they’ll have an equally important role as we rebuild our housing economy. I’m a little concerned about the idea of taking away any limit to the line of credit from the Treasury. I’m not sure that’s wise. I can see why it shouldn’t be just “nickeled and dimed,” with incremental increases, but we might want to take a closer look at that.

This entry was posted on Wednesday, July 16th, 2008 at 10:18 am and is filed under Politics, Economy/Budget .