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McHenry to Democrats: We Need to Get Serious About Creating a Sustainable Housing Finance System That Can Withstand the Pressures of a Market Downturn

Washington, Jun 29 -

Today, the House Financial Services Committee is holding a hearing on the housing market. While Democrats’ out-of-control spending unleashed record inflation, pushing the dream of homeownership out of the reach of many American families, Committee Republicans are focused on creating a sustainable housing finance system that can withstand a market downturn.

Watch Republican Leader Patrick McHenry’s (NC-10) opening remarks here.

Read Republican Leader McHenry’s opening remarks as prepared for delivery:

Thank you, Madam Chair.

“Just last week, this Committee marked up the Chair’s Downpayment Toward Equity Act—a massive $100-billion spending spree that would continue fueling skyrocketing housing costs.

“It’s this kind of unchecked spending that is pushing the housing market from boom to bust for the average American family. 

“That’s on top of 40-year-high inflation and skyrocketing consumer prices across the board, outpacing wage gains.

“This is clobbering household budgets. 

“And if purchasing a home is still within the realm of possibility, that’ll cost you double from what it did last year—from 3 to 6 percent now for a 30-year fixed rate mortgage. 

“Let’s break this down.

“The median sales price for a house so far in 2022 is $428,700. 

“With an FHA minimum allowable down payment of 3.5 percent, excluding closing costs and other fees, that means a first-time borrower might have to finance as much as $413,700. 

“At 6 percent interest rates, you’re looking at a monthly payment of $2,480, up from $1,740.

“That’s a $740 a month difference, or roughly a month’s worth of groceries for a family of four.

“Potential homebuyers are being pushed out of the market today.

“Instead of taking responsibility for this economic wreckage, President Biden is blaming anyone and anything other than his own policies. 

“Earlier this month, he claimed there was ‘zero evidence’ that the $2.66 trillion dollars in new spending from his first 500 days in office had anything to do with inflation. 

“He even called that notion ‘bizarre.’

“If you ask me, what’s ‘bizarre’ here is the cognitive dissonance between the Democrats’ bad policies and their lack of accountability for this economic dumpster fire. 

“We’ve been down this road before, and we know where it inevitably leads. 

“It starts with Democrats creating new programs or pressuring the GSEs to make increasingly risky loans for borrowers who can’t keep up with the artificial price spikes they’ve created. 

“And it ends with those families, many low-income or first-time borrowers, being hurt the most when the housing market has a downturn.

“And taxpayers are left on the hook for tens of billions of dollars.

“It doesn’t have to be this way.

“We need to get serious about creating a sustainable housing finance system that can withstand the pressures of a market downturn. 

“We should focus on ways to actually increase the supply of housing and create stable prices.

“And we should restore proper oversight of our housing finance regulators like FHFA and FHA, both of which have somehow gone more than two years without appearing before this Committee. 

“In fact, today’s hearing would have been the perfect venue to hear from FHFA Director Sandra Thompson.

“Ranking Member Hill and I sent a letter last week urging the Chair to invite Director Thompson to testify on the growing threats to our housing finance system.

“It’s those threats on which we should be focused.

“Instead, all we’ll get today is more excuses, more pleas for new reckless government housing spending, and more empty promises that this time it will be different. 

“I yield back.”

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