The Omnibus Bill and Housing

Let’s look under the hood of the new omnibus bill for a second, as it relates to housing. Just taking a peek at a few things that stood out:

page 1745	“New commitments to guarantee single family loans insured under the Mutual Mortgage Insurance Fund”	$400,000,000,000
page 1746	“New commitments to guarantee loans insured under the General and Special Risk Insurance Funds”	$30,000,000,000
page 1747	​“New commitments to issue guarantees to carry out the purposes of section 306 of the National Housing Act”	$900,000,000,000

That is a total of $1.33T (that is $1,330 with another 9!!! zeroes) to guarantee mortgage loans.

The Agency MBS market is $5.5T

The total value of private residential real estate is around $43T

Fun times with math:

• A stack of a trillion dollars would reach 1/4th the way to the moon (it's true)

• One trillion seconds equals 32,000 years

• One trillion mm = going around the world 25 times…almost as wide as the sun

In short: there are backstops holding up the mortgage market.