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.