John M. Mason submits: The Great Recession is over. Remember? The recession ended in June 2009, getting close to two years ago.
To many, it sure doesn’t feel like it. Since the second quarter of 2009, over the last six quarters, real GDP has grown by 4.5%. The average year-over-year growth rate for the five quarters since the recession ended is 2.3%. This is way below historical experience.
The reason: Housing usually leads the economy into a recession, and, housing usually leads the economy out of the recession.
Not so this time.
And, this is why we are in the mess we are in. Housing is not going to rebound any time soon.
For one thing, banks and thrift institutions (what are they?) really don’t want to provide financing for mortgages. They really don’t want to hold mortgages. For another, the mess with Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) is so uncertain and confused and uncomfortable that they want to have as little to do with mortgages as possible.
In order to understand this, I had to go through the mortgage process myself last year. I have no problem getting a loan. I went to the bank where I do most of my business and asked about getting a loan. Sure, they said, and arranged a meeting with the mortgage banker they do business with who approved my loan and all of a sudden my mortgage is with Fannie Mae and I am making payments to the mortgage servicing subsidiary of a major
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