About 12 years ago now, we made our final march down, from 30-year amortizations down to 25, coming down from 40, which was probably too high. That last hit, from 30 down to 25, really knocked thousands of potential buyers out of the market.
We suggest that it is time to return to 30-year amortizations for insured mortgages for first-time buyers. It gives them extra purchasing power. At this time, when we look to double housing starts, we can't just build houses with nobody able to buy them. The days of building spec homes are not really upon us. We're going to need to make sure we have qualified purchasers.
When you're looking at entry-level homes, getting first-time buyers into the market with 30-year amortizations would make a lot of sense. They're not going to drive the entire housing market crazy. In fact, it's a little bit of a chicken-and-egg.... You need more homes, but you can't have more homes unless people can afford them.
Let's enable those young people to get in. They're going to be in the mortgage market for more than 25 years anyway. They're going to get in, live in that house for a few years and then get a move-up home, at which point, ironically, they can get a 30-year amortization or a 35-year amortization on their next home. Somehow we're not allowing young people to get into the market in the first place.