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There’s an old Chinese saying: 修身齐家治国平天下 ‘Xiu Shen, Qi Jia, Zhi Guo, Ping Tian Xia’. It means "make yourself better, improve life for your family, then help others, then go change the world!" Kinda the same to entrepreneurs.
Founder of https://t.co/yyLfH8mOar and https://t.co/ZzTStsMvdh
This analysis, of course, looks nothing like the way most people in the mainstream discuss housing policy. Instead, people generally focus on far more simplistic ideas, most prominently the notion that buying a house is inherently better than renting for almost everyone, and that people only rent because they cannot afford to buy. People tend to offer various flawed arguments for this idea. For example, people often claim that buying a house is better because one should speculate on housing prices, betting that housing prices will appreciate faster than the general market. However, this argument is almost always unsound. No responsible financial advisor would recommend taking out a large loan to speculate on a single, undiversified asset. The relevant considerations are not really very different just because the speculative asset happens to be a house. Another idea people tend to bring up is the concept that by renting, you're "throwing money away" because, unlike when paying off a mortgage, you aren't accumulating equity by paying down the principal. But this idea is also false. You don't acquire wealth through principal payments. You're just reducing your debt. Renting isn't throwing away money; it's just a way to purchase a different, reduced bundle of rights on a good by securing it through a time-bounded lease rather than through asset ownership. There is no economic reason to expect home ownership to lead to net present cost savings, unless you disagree with market prices or unless government subsidies and regulations have distorted the market. Of course, the government does distort the market in practice. However, that's not a good justification for making things worse through additional market interventions. At most, it simply means that taking advantage of government programs that encourage home buying may be in your personal interest.
Co-founder of @MechanizeWork Married to @natalia__coelho email: matthew at mechanize dot work
You might think that Trump would be implicitly subsidizing the housing market by letting the GSEs Fannie Mae and Freddie Mac buy 50-year mortgages. The argument here is that investors expect the government to bail out the GSEs if they ever face losses, an expectation created during the 2008 financial crisis, when the government took them into conservatorship and provided Treasury funding support. Because investors still price their securities as if that protection exists, expanding what the GSEs can buy is often described as an implicit government subsidy to housing finance. But this argument is misleading. In fact, Trump has taken steps to end the very conservatorships that created those expectations. In 2019, he ordered the Treasury to produce a plan to end them. The Treasury and the FHFA then revised their PSPAs so the GSEs could keep capital. More recently, in May 2025, Trump said he was working on taking Fannie Mae and Freddie Mac public. In October 2025, FHFA Director William Pulte confirmed the administration is working toward ending the conservatorships. I personally think Trump should go even further than merely ending the conservatorships and taking the GSEs public. However, if he does accomplish this and then deregulates mortgage rules afterward, it wouldn't really create a meaningful subsidy. Instead, there would mostly just be a more open credit market. Even though we should obviously *also* be deregulating local housing rules, this type of federal deregulation seems straightforwardly good from the perspective of consumer welfare. This becomes clear once you understand the fundamental economic trade-offs between renting and buying a home through a loan. Unfortunately, I suspect this consumer welfare argument isn't intuitive to almost anyone. The vast majority of people have a poor understanding of the relevant trade-offs when choosing between renting and buying an asset using a loan. This poor understanding causes them to say misguided things about the housing market and what laws we should adopt to fix the alleged problems in this market. So let me explain some of the basics. Contrary to popular misconception, when you buy an asset like a house with a loan, you own the asset from day one, both economically and typically legally as well. The lender doesn't own it. They just hold a security interest that gives them the right to repossess it if you default. This is fundamentally different from renting because renters have no property rights: they can't sell, mortgage, or alter the asset, and their use is limited by a lease agreement that can be terminated. This is the most fundamental economic justification for choosing between renting and taking out a mortgage to buy a house. Different people have different preferences about how much they care about acquiring housing property rights, suggesting that some people should buy housing and others should rent. Good housing policy should not be about protecting people from "greedy" lenders, but instead about recognizing variation in preferences, and ensuring that the market can provide options tailored to people's individual circumstances so they can better obtain a housing situation that fits their needs.
This analysis, of course, looks nothing like the way most people in the mainstream discuss housing policy. Instead, people generally focus on far more simplistic ideas, most prominently the notion that buying a house is inherently better than renting for almost everyone, and that people only rent because they cannot afford to buy. People tend to offer various flawed arguments for this idea. For example, people often claim that buying a house is better because one should speculate on housing prices, betting that housing prices will appreciate faster than the general market. However, this argument is almost always unsound. No responsible financial advisor would recommend taking out a large loan to speculate on a single, undiversified asset. The relevant considerations are not really very different just because the speculative asset happens to be a house. Another idea people tend to bring up is the concept that by renting, you're "throwing money away" because, unlike when paying off a mortgage, you aren't accumulating equity by paying down the principal. But this idea is also false. You don't acquire wealth through principal payments. You're just reducing your debt. Renting isn't throwing away money; it's just a way to purchase a different, reduced bundle of rights on a good by securing it through a time-bounded lease rather than through asset ownership. There is no economic reason to expect home ownership to lead to net present cost savings, unless you disagree with market prices or unless government subsidies and regulations have distorted the market. Of course, the government does distort the market in practice. However, that's not a good justification for making things worse through additional market interventions. At most, it simply means that taking advantage of government programs that encourage home buying may be in your personal interest.
You might think that Trump would be implicitly subsidizing the housing market by letting the GSEs Fannie Mae and Freddie Mac buy 50-year mortgages. The argument here is that investors expect the government to bail out the GSEs if they ever face losses, an expectation created during the 2008 financial crisis, when the government took them into conservatorship and provided Treasury funding support. Because investors still price their securities as if that protection exists, expanding what the GSEs can buy is often described as an implicit government subsidy to housing finance. But this argument is misleading. In fact, Trump has taken steps to end the very conservatorships that created those expectations. In 2019, he ordered the Treasury to produce a plan to end them. The Treasury and the FHFA then revised their PSPAs so the GSEs could keep capital. More recently, in May 2025, Trump said he was working on taking Fannie Mae and Freddie Mac public. In October 2025, FHFA Director William Pulte confirmed the administration is working toward ending the conservatorships. I personally think Trump should go even further than merely ending the conservatorships and taking the GSEs public. However, if he does accomplish this and then deregulates mortgage rules afterward, it wouldn't really create a meaningful subsidy. Instead, there would mostly just be a more open credit market. Even though we should obviously *also* be deregulating local housing rules, this type of federal deregulation seems straightforwardly good from the perspective of consumer welfare. This becomes clear once you understand the fundamental economic trade-offs between renting and buying a home through a loan. Unfortunately, I suspect this consumer welfare argument isn't intuitive to almost anyone. The vast majority of people have a poor understanding of the relevant trade-offs when choosing between renting and buying an asset using a loan. This poor understanding causes them to say misguided things about the housing market and what laws we should adopt to fix the alleged problems in this market. So let me explain some of the basics. Contrary to popular misconception, when you buy an asset like a house with a loan, you own the asset from day one, both economically and typically legally as well. The lender doesn't own it. They just hold a security interest that gives them the right to repossess it if you default. This is fundamentally different from renting because renters have no property rights: they can't sell, mortgage, or alter the asset, and their use is limited by a lease agreement that can be terminated. This is the most fundamental economic justification for choosing between renting and taking out a mortgage to buy a house. Different people have different preferences about how much they care about acquiring housing property rights, suggesting that some people should buy housing and others should rent. Good housing policy should not be about protecting people from "greedy" lenders, but instead about recognizing variation in preferences, and ensuring that the market can provide options tailored to people's individual circumstances so they can better obtain a housing situation that fits their needs.
This analysis, of course, looks nothing like the way most people in the mainstream discuss housing policy. Instead, people generally focus on far more simplistic ideas, most prominently the notion that buying a house is inherently better than renting for almost everyone, and that people only rent because they cannot afford to buy. People tend to offer various flawed arguments for this idea. For example, people often claim that buying a house is better because one should speculate on housing prices, betting that housing prices will appreciate faster than the general market. However, this argument is almost always unsound. No responsible financial advisor would recommend taking out a large loan to speculate on a single, undiversified asset. The relevant considerations are not really very different just because the speculative asset happens to be a house. Another idea people tend to bring up is the concept that by renting, you're "throwing money away" because, unlike when paying off a mortgage, you aren't accumulating equity by paying down the principal. But this idea is also false. You don't acquire wealth through principal payments. You're just reducing your debt. Renting isn't throwing away money; it's just a way to purchase a different, reduced bundle of rights on a good by securing it through a time-bounded lease rather than through asset ownership. There is no economic reason to expect home ownership to lead to net present cost savings, unless you disagree with market prices or unless government subsidies and regulations have distorted the market. Of course, the government does distort the market in practice. However, that's not a good justification for making things worse through additional market interventions. At most, it simply means that taking advantage of government programs that encourage home buying may be in your personal interest.
This analysis, of course, looks nothing like the way most people in the mainstream discuss housing policy. Instead, people generally focus on far more simplistic ideas, most prominently the notion that buying a house is inherently better than renting for almost everyone, and that people only rent because they cannot afford to buy. People tend to offer various flawed arguments for this idea. For example, people often claim that buying a house is better because one should speculate on housing prices, betting that housing prices will appreciate faster than the general market. However, this argument is almost always unsound. No responsible financial advisor would recommend taking out a large loan to speculate on a single, undiversified asset. The relevant considerations are not really very different just because the speculative asset happens to be a house. Another idea people tend to bring up is the concept that by renting, you're "throwing money away" because, unlike when paying off a mortgage, you aren't accumulating equity by paying down the principal. But this idea is also false. You don't acquire wealth through principal payments. You're just reducing your debt. Renting isn't throwing away money; it's just a way to purchase a different, reduced bundle of rights on a good by securing it through a time-bounded lease rather than through asset ownership. There is no economic reason to expect home ownership to lead to net present cost savings, unless you disagree with market prices or unless government subsidies and regulations have distorted the market. Of course, the government does distort the market in practice. However, that's not a good justification for making things worse through additional market interventions. At most, it simply means that taking advantage of government programs that encourage home buying may be in your personal interest.
Co-founder of @MechanizeWork Married to @natalia__coelho email: matthew at mechanize dot work
You might think that Trump would be implicitly subsidizing the housing market by letting the GSEs Fannie Mae and Freddie Mac buy 50-year mortgages. The argument here is that investors expect the government to bail out the GSEs if they ever face losses, an expectation created during the 2008 financial crisis, when the government took them into conservatorship and provided Treasury funding support. Because investors still price their securities as if that protection exists, expanding what the GSEs can buy is often described as an implicit government subsidy to housing finance. But this argument is misleading. In fact, Trump has taken steps to end the very conservatorships that created those expectations. In 2019, he ordered the Treasury to produce a plan to end them. The Treasury and the FHFA then revised their PSPAs so the GSEs could keep capital. More recently, in May 2025, Trump said he was working on taking Fannie Mae and Freddie Mac public. In October 2025, FHFA Director William Pulte confirmed the administration is working toward ending the conservatorships. I personally think Trump should go even further than merely ending the conservatorships and taking the GSEs public. However, if he does accomplish this and then deregulates mortgage rules afterward, it wouldn't really create a meaningful subsidy. Instead, there would mostly just be a more open credit market. Even though we should obviously *also* be deregulating local housing rules, this type of federal deregulation seems straightforwardly good from the perspective of consumer welfare. This becomes clear once you understand the fundamental economic trade-offs between renting and buying a home through a loan. Unfortunately, I suspect this consumer welfare argument isn't intuitive to almost anyone. The vast majority of people have a poor understanding of the relevant trade-offs when choosing between renting and buying an asset using a loan. This poor understanding causes them to say misguided things about the housing market and what laws we should adopt to fix the alleged problems in this market. So let me explain some of the basics. Contrary to popular misconception, when you buy an asset like a house with a loan, you own the asset from day one, both economically and typically legally as well. The lender doesn't own it. They just hold a security interest that gives them the right to repossess it if you default. This is fundamentally different from renting because renters have no property rights: they can't sell, mortgage, or alter the asset, and their use is limited by a lease agreement that can be terminated. This is the most fundamental economic justification for choosing between renting and taking out a mortgage to buy a house. Different people have different preferences about how much they care about acquiring housing property rights, suggesting that some people should buy housing and others should rent. Good housing policy should not be about protecting people from "greedy" lenders, but instead about recognizing variation in preferences, and ensuring that the market can provide options tailored to people's individual circumstances so they can better obtain a housing situation that fits their needs.
This analysis, of course, looks nothing like the way most people in the mainstream discuss housing policy. Instead, people generally focus on far more simplistic ideas, most prominently the notion that buying a house is inherently better than renting for almost everyone, and that people only rent because they cannot afford to buy. People tend to offer various flawed arguments for this idea. For example, people often claim that buying a house is better because one should speculate on housing prices, betting that housing prices will appreciate faster than the general market. However, this argument is almost always unsound. No responsible financial advisor would recommend taking out a large loan to speculate on a single, undiversified asset. The relevant considerations are not really very different just because the speculative asset happens to be a house. Another idea people tend to bring up is the concept that by renting, you're "throwing money away" because, unlike when paying off a mortgage, you aren't accumulating equity by paying down the principal. But this idea is also false. You don't acquire wealth through principal payments. You're just reducing your debt. Renting isn't throwing away money; it's just a way to purchase a different, reduced bundle of rights on a good by securing it through a time-bounded lease rather than through asset ownership. There is no economic reason to expect home ownership to lead to net present cost savings, unless you disagree with market prices or unless government subsidies and regulations have distorted the market. Of course, the government does distort the market in practice. However, that's not a good justification for making things worse through additional market interventions. At most, it simply means that taking advantage of government programs that encourage home buying may be in your personal interest.