Joint proposal would reduce spread between mortgage rates, Treasury bonds
The Independent Community Bankers of America (ICBA), Community Home Lenders of America, and National Association of REALTORS today proposed a solution to reduce historically high long-term mortgage rates relative to long-term Treasury bonds. The groups’ plan would reduce the historically large spread between 30-year mortgage rates and 10-year Treasuries to promote homeownership affordability.
“With housing accounting for nearly 20% of the nation’s gross domestic product and affecting homeowners and renters nationwide, policymakers must act to promote housing affordability,” ICBA President and CEO Rebeca Romero Rainey said today. “ICBA and the nation’s community banks call on the administration to implement our plan to address lending challenges and mortgage-servicing impediments, which could support demand for mortgage-backed securities and reduce mortgage rates by an estimated 100 to 150 basis points.”
With the combination of high mortgage rates and low housing construction leading to historically unaffordable housing and hampering mortgage lending, the groups issued a joint letter to the White House and Treasury Department urging:
ICBA will continue working with policymakers to help ease nationwide housing affordability challenges to promote affordable housing for American homebuyers.
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