Economics focus Houses built on sand Economist.com:
Sep 13th 2007 From The Economist print edition
America's housing boom was almost modest by global standards—which is worrying EVERYTHING in America is bigger. Cars, hotel rooms, servings at dinner, the salaries of sports stars and chief executives. So anything that merits the adjective “jumbo” is extravagantly large. Except, that is, for shrimp and home loans. In America a jumbo mortgage is one that exceeds the authorised limit for loans bought and securitised by Fannie Mae and Freddie Mac, the government-sponsored lenders. That cap was increased this year, to $417,000—a sum that, at today's exchange rates and prices, is barely enough to buy a cramped flat in the outer suburbs of London. Could it be that America's housing boom, which has now turned horribly sour, was not even super-sized?
Sep 13th 2007 From The Economist print edition
America's housing boom was almost modest by global standards—which is worrying EVERYTHING in America is bigger. Cars, hotel rooms, servings at dinner, the salaries of sports stars and chief executives. So anything that merits the adjective “jumbo” is extravagantly large. Except, that is, for shrimp and home loans. In America a jumbo mortgage is one that exceeds the authorised limit for loans bought and securitised by Fannie Mae and Freddie Mac, the government-sponsored lenders. That cap was increased this year, to $417,000—a sum that, at today's exchange rates and prices, is barely enough to buy a cramped flat in the outer suburbs of London. Could it be that America's housing boom, which has now turned horribly sour, was not even super-sized?
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