 The Dominance of the U.S. 30-Year Fixed Rate Residential MortgageRichard J. Kish Journal of Real Estate Practice and Education, 2022, vol. 24, issue 1, 1-16 Abstract: The United States (U.S.) is the only country in the world in which the 30-year fixed rate residential mortgage is the dominant home mortgage product. After reviewing mortgage offerings from a sample of countries to contrast their differences from the U.S. mortgage market, the key differential driving the U.S. market to the 30-year fixed rate mortgage is the active encouragement by government policy. This reinforcing promotion of the 30-year fixed rate mortgage is provided by government and “quasi” government institutions that guarantee the mortgage in the after-market. This guarantee coupled with the vast securitization of mortgages which require a standardization of the underlying product (of which the 30-year fixed rate mortgage is the largest sector) contributes to this dominance. Thus securitization, which allows lenders to offset interest rate and prepayment risks to the buyers of these securitized mortgage products, further drives the demand for more 30-year fixed rate offerings. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:rjrpxx:v:24:y:2022:i:1:p:1-16 Ordering information: This journal article can be ordered from DOI: 10.1080/15214842.2020.1757357 Access Statistics for this article Journal of Real Estate Practice and Education is currently edited by Reid Cummings More articles in Journal of Real Estate Practice and Education from Taylor & Francis Journals |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.