December 17, 2025
Federal Home Loan Banks during Financial Stress
I was happy to participate in the discussion group process for the Government Accountability Office’s report, Federal Home Loan Banks: Role During Financial Stress and Members’ Borrowing Trends and Outcomes (GAO-26-107373). The Highlights of the report include
The Federal Home Loan Bank (FHLBank) System consists of 11 federally chartered FHLBanks that support liquidity by making loans to member financial institutions (including banks) in the U.S. As of June 2025, 93 percent of banks (approximately 4,100) were members of an FHLBank, allowing them to obtain liquidity via secured loans. GAO’s analysis found that the FHLBanks generally serve as a reliable and consistent source of funding for banks of all sizes throughout the financial cycle. They can also play a key role in the health of small banks (those with $10 billion or less in assets). This has been the case despite concerns raised in some academic and other literature that FHLBank lending could exacerbate periods of financial stress—for example, by masking problems at troubled member banks or increasing resolution costs when a member bank fails.
Banks’ FHLBank borrowing trends. From 2015 through June 2025, most U.S. banks were FHLBank members and obtained secured loans at least once. Banks’ total outstanding borrowing (as of quarter-end) ranged from $189 billion to $804 billion during this period. Although most active FHLBank members maintained relatively consistent FHLBank borrowing, a small number of large banks (with more than $10 billion in assets) drove substantial increases in aggregate borrowing at the onset of the COVID-19 pandemic in 2020 and during the March 2023 liquidity crisis. For example, large banks were responsible for 97 percent of the increased borrowing in the first quarter of 2023. However, median FHLBank borrowing as a share of median total assets generally stayed within a consistent range from 2015 through June 2025, including for large banks. This suggests that their overall reliance on FHLBank loans during stress periods was largely unchanged.
Outcomes associated with FHLBank borrowing. GAO’s econometric models, which controlled for bank health, macroeconomic factors, and economic cycles, found that higher FHLBank borrowing by a bank was generally associated with positive outcomes for the bank. From 2015 through 2024, higher FHLBank borrowing was associated with (1) increases in real estate lending and (2) lower likelihood of being flagged as a problem bank or of failing or closing voluntarily. These results were largely driven by small banks, which make up 97 percent of banks in GAO’s analysis.
December 17, 2025 | Permalink | No Comments
December 10, 2025
Housing Stability in the Mamdani Administration
By Phillip Capper, Wellington, NZ – 143rd. St., Bronx, NY, 2/08, CC BY 2.0
I am looking forward to the discussion tonight on Housing Stability in the Mamdani Administration, hosted by the Urban Design Forum. While it is sold out, we will be discussing “what a potential rent freeze may look like under the Mamdani administration” and I am sure there will be some good reporting on this topic over the coming weeks and months. The Forum writes,
As living costs continue to rise, Mayor-elect Mamdani has proposed freezing rents on stabilized apartments as a way to support tenants and protect housing stability. At the same time, critics warn that such measures could make it harder for building owners—particularly those managing older buildings with thin margins—to maintain safe, livable homes.
We’ll begin with an overview presentation by Mark Willis of the Furman Center, followed by a panel with Oksana Mironova, Emily Kurtz, David Reiss, and Thomas Yuon how the next administration can promote tenant stability and preserve affordable housing.
What strategies can preserve deep affordability while ensuring stabilized buildings remain financially sustainable?
December 10, 2025 | Permalink | No Comments
November 12, 2025
More on the 50-Year Mortgage
CC0 1.0 Public Domain Pixnio
Marketplace interviewed me in Trump Floated a 50-Year Mortgage to Address Housing Affordability. How Would That Work? The transcript reads,
President Donald Trump proposed a 50-year mortgage over the weekend, in a social media post. The idea came from Bill Pulte, the Federal Housing Finance Agency director.
“The average age of a first-time home buyer is now 40 years old. The notion that you’d finish paying off your mortgage at 90 is probably not something that most people contemplate when they want to buy a home,” said David Reiss, a professor at Cornell Law School.
Still, in the short term, a 50-year mortgage would appear cheaper — slightly. Robert Bridges did the math; he’s associate professor emeritus at the University of Southern California’s Marshall School of Business.
“The payment on a 50-year mortgage, for instance, for a $200,000 loan at 6% would be about $1,052, where a 30-year loan would have a payment of $1,199,” Bridges said.
So that’s a difference of $147 in that example. But it comes with costs to the borrower as well, for starters the interest rate would be higher.
“You pay more for a 30-year mortgage than you do for a 15-year mortgage,” Reiss said. “So you will probably pay more for a 50-year mortgage than you would for a 30-year mortgage.”
According to the American Enterprise Institute, a 50-year mortgage would, initially, increase a homeowner’s buying power by 8%.
“Over time, maybe months, maybe years, that would fade,” said Edward Pinto, a senior fellow at the American Enterprise Institute.
Basically, if everyone’s buying power goes up, so does the price of housing. And a longer mortgage also means it takes longer to build up equity.
“And then you’re really left with not much advantage, and you become really a renter with a mortgage,” Pinto said.
A longer loan where it takes longer to build equity also leaves homeowners more vulnerable to risks in the market if home prices stagnate, which Pinto predicts they will in the coming years.
“This has been tried with 40-year loans before, and every time it’s been tried in the United States, it’s failed,” Pinto said.
Failed because they’re too risky, he said. That’s one reason we don’t already have 50-year mortgages.
“It doesn’t seem like this is really the remedy for the housing problem that we all know we have in this country,” Bridges said.
Which is first and foremost, he said, that we don’t have enough of it.
November 12, 2025 | Permalink | No Comments
November 11, 2025
Trump & Pulte’s 50-Year Mortgage
CC BY-NC 4.0 Deed https://creativecommons.org/licenses/by-nc/4.0/
Politico quoted me in ‘Band-Aid,’ ‘Distraction’: Experts Slam Pulte, Trump 50-Year Mortgage Idea. It opens,
The Trump administration is entertaining a potential plan for the government to back 50-year mortgages to address a housing affordability crisis.
But, in a housing market defined by low supply, industry experts warn that changes in financing are likely to be little more than a “band-aid” and a “gimmick,” while posing bigger risks to homebuyers.
“As a country, the mortgage term is not what we should be worried about. We should be focused on building more supply,” said Troy Ludtka, senior U.S. economist at SMBC Nikko Securities America.
Federal Housing Finance Agency Director Bill Pulte posted on X Saturday that the Trump administration is working on directing government-owned housing finance companies Fannie Mae and Freddie Mac to support 50-year home mortgages, calling the move ”a complete game changer.” President Donald Trump also posted on his social media platform, Truth Social, supporting the idea.
The proposal comes after Trump directed Pulte to leverage Fannie and Freddie to ramp up the country’s stalled housing production to bring down costs and address the estimated shortage of 4.7 million homes. But the new proposal is raising concerns about whether such a major change to the two giant mortgage financiers’ buying rules could destabilize a central strength of homeownership — the opportunity to build wealth over time.
In a series of follow-up posts over the weekend, Pulte wrote that “a 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!” He sounded off about other possible ideas like supporting portable mortgages, which can transfer to a new property, and assumable mortgages, which can be transferred to a property’s new buyer.
An FHFA spokesperson told POLITICO, “We continue to evaluate all options to address housing affordability, including studying how to make mortgages assumable or portable.”
And a White House spokesperson said in a statement, “President Trump is always exploring new ways to improve housing affordability for everyday Americans. Any official policy changes will be announced by the White House.”
Experts expect that extending the potential length of Fannie- and Freddie-supported home loans would require congressional support.
Fannie and Freddie don’t offer loans directly to potential homebuyers; instead, they purchase mortgages from lenders to package and sell on the secondary market. This frees up resources for lenders to issue new mortgages.
By purchasing 50-year mortgages, Fannie and Freddie could make the longer-term loans more appealing for lenders to offer. With a longer loan, monthly payments could come down, but it also comes at a cost to homebuyers.
“It would lead to buyers building equity in their homes more slowly. At the beginning of the mortgage, more of those payments tend to be interest… This is more of a stopgap band-aid to address affordability,” said Gennadiy Goldberg, head of US rates strategy at TD Securities.
Sharon Cornelissen, director of housing at the Consumer Federation of America, called the proposal “a distraction” and warned that although expanding the accessibility of 50-year mortgages could lower monthly payments, “the cost of that is that people won’t be able to build wealth through homeownership.”
And as first-time homebuyers get older, the 50-year mortgage appears less manageable, Cornelissen said. Last week, the National Association of Realtors shared findings that the median age of first-time homebuyers had risen to an all-time high of 40.
“So you’ll be 90,” Cornelissen said, adding that finishing payment on a 30-year mortgage is a “stabilizing force” for people going into retirement.
David Reiss, a Cornell Law School professor and real estate finance researcher, said a move toward 50-year mortgages would require homebuyers to rethink how they save for retirement.
“We often hear financial advice that you want to try to pay off your mortgage before the time that you retire,” Reiss said. “So that’s a problem.”
November 11, 2025 | Permalink | No Comments
November 5, 2025
Understanding NYC’s Rent-Stabilized Housing Stock
I will be moderating an NYU Furman Center Policy Breakfast on NYC’s Rent-Stabilized Housing: Understanding Different Segments of the Stock and Why It Matters on November 19th. The link to register is here.
Nearly one million apartments in New York City are rent-stabilized. In 2023, the median rent among rent-stabilized tenants was about $1,500, compared with $2,000 for market-rate renters. These units play a central role in maintaining housing affordability across the city, yet they are often discussed as a single, uniform category.
Our policy breakfast will explore the diversity among buildings with rent-stabilized units, spanning older pre-1974 buildings and newer developments regulated because they received public financing or property tax reductions. Panelists will discuss how these differences shape the challenges and policy considerations facing the rent-stabilized housing stock today. The session aims to deepen understanding of the current landscape and to ground debate on what tailored interventions may be needed to preserve the affordability and quality of this essential part of New York City’s housing supply.
Panel
Kenny Burgos, Chief Executive Officer, New York Apartment Association
Emily Kurtz, Chief Housing Officer, RiseBoro Community Partnership, Inc.
Jane Silverman, Executive Director, Community Development Banking, JPMorgan Chase Bank
Samuel Stein, Senior Policy Analyst, Community Service Society
Moderator
David Reiss, Visiting Professor of Clinical Law, NYU School of Law,
and former Chair, Rent Guidelines Board
Date: Wednesday, November 19, 2025
Time: 8:45 – 10:00 AM ET
NYU School of Law – Vanderbilt Hall
40 Washington Square South
New York, NY 10012
A livestream link will be provided for online attendees.
November 5, 2025 | Permalink | No Comments
VIDEO: Retrenchment and Rollback in Consumer Protection and Housing
The video for the ABA Professor’s Corner webinar on Retrenchment and Rollback: Federal Consumer Protection and Housing has been posted. Rosa Newman (Elon) moderated and I spoke alongside Kathleen Engel (Suffolk) and Julie Patterson Forrester Rogers (SMU). The session explored “the federal government’s retrenchment on consumer and civil rights protections during the Trump Administration and the consequences for housing. The panel will connect shifts in federal consumer protection frameworks to the on-the-ground impacts for affordable housing development, tenant stability, and fair housing enforcement.”
November 5, 2025 | Permalink | No Comments
November 3, 2025
Does Homeownership Build Wealth?
CC BY 2.0 iStock
Marketplace interviewed me for a story to answer the question, Does Homeownership Build Wealth? It reads, in part,
With housing prices skyrocketing in recent years, homeownership has become increasingly out of reach for many Americans.
David Reiss, a law professor at Cornell University who studies housing policy, said there is a bit of a chicken-or-the-egg question when it comes to homeownership and wealth: Does homeownership build wealth, or do people who build wealth buy homes?
There is some truth to the latter, but the general consensus among experts is that homeownership does build wealth, he said.
That’s due to a variety of factors: home values appreciate over time, home ownership is like a forced savings account because you’re paying down your mortgage, and homeowners can benefit from tax subsidies, experts told Marketplace.
* * *
Another benefit of homeownership is that you’re also forced to save as you pay off your house, Reiss said.
“The typical person builds up equity over time by paying down their mortgage,” he explained. Once you pay off the house, you’re the only one who owns it and your lender has no claim over it, he said.
Homeownership Drawbacks, Inequities and Barriers
For minority and low-income communities, homeownership doesn’t provide the same level of wealth accumulation, Reiss said.
Home values in majority-white neighborhoods have risen faster, with values a these areas growing $230,000 between 2012 and 2022, compared to $122,500 for majority-Black neighborhoods over the same time period, according to the real estate brokerage Redfin.
Research from the Brookings Institute has also found that home values in Black neighborhoods are about 21% to 23% below what they would be in non-Black neighborhoods.
*. *. *
In “cities of opportunity” that have good job prospects, like New York, Los Angeles or San Francisco, housing costs are very expensive, Reiss said. In San Francisco, the average home value is $1.2 million, according to Zillow.
But in places where housing is more affordable, there are fewer job opportunities, Reiss said.
There is some good news: home prices are starting to cool down. But prospective buyers are still sitting it out for now due to uncertainty about the job market and the possibility that prices could fall even lower.
Owning a home is also a big commitment and entails taking on a lot of responsibilities.
“Are you ready to be the person who deals with a leak or with a broken toilet or stuff like that? Not everybody wants to do that,” Reiss said.
And if you’re planning to move in a few years, it may not make sense to purchase a house, Reiss added.
* * *
Are There Other Ways to Build Wealth?
Billionaire Warren Buffet once said “investing in yourself is the best thing you can do,” an axiom that Reiss said he agrees with.
“I think effectively what he’s talking about is education. So you have the ability to create marketable skills that can generate income over your working life,” Reiss said.
Another way to invest in yourself is to improve your financial literacy, Reiss said. He noted that one of his friends had been putting her retirement savings in a money market account, failing to reap any returns from upswings in the stock market.
Reiss said you can build wealth by saving early, having a diversified portfolio, and investing in index funds, which are generally low-cost, low-risk investment vehicles that allow you to invest in a pool of companies.
* * *
If you do decide to purchase a home, the ROI isn’t the most important factor you should consider when buying a house.
“People shouldn’t lose sight of the fact that homeownership is first and foremost about having a home for you and your loved ones,” Reiss said.
November 3, 2025 | Permalink | No Comments
