Posts by Sean Becketti
VP Sean Becketti
As chief economist, Sean Becketti leads a team that forecasts mortgage and housing market trends and conducts analysis and research on economic and policy issues affecting Freddie Mac. Prior to joining Freddie Mac, Becketti was senior vice president and head of modeling and analytics at Flagstar Bank. Earlier, he headed up Fannie Mae's applied research function where he led a 70-person team of modelers, analysts and developers. His experience also includes senior executive roles with Washington Mutual and Wells Fargo. Becketti holds master's and Ph.D. degrees from Stanford University and a bachelor's degree from University of California – Santa Cruz.
Remember in 2013 when the 15-year fixed-rate mortgage was an unbelievable bargain at just over 2.5 percent, the lowest in recorded history and about three-quarters of a percentage point below a 30-year fixed-rate loan? So everyone buying a house was getting a 15-year loan, right? Nope. Thirty-year fixed-rate mortgages dominated, accounting for almost 90 percent of the home-purchase loan market.
The second half of the 20th century brought with it remarkable growth in homeownership. For the first four decades of the century, homeownership rates were relatively stable and remained below 50 percent, dropping as low as 44 percent in 1940. Following World War II, the rate of homeownership surged, propelled by the GI Bill, the institutionalization of the 30-year fixed-rate mortgage, and the creation of FHA, VA, and the GSEs.
Today, the homeownership rate is less than 63 percent, the lowest rate in half a century. It has been declining for over a decade and experts are projecting it will continue to keep falling—perhaps even below 60 percent.
One of the most important keys to today’s single-family housing market is homeowners who were born before the first-ever episode of Star Trek aired in the 1960s. Today, more than 50 years later, Baby Boomers and other homeowners over the age of 55 control almost two-thirds of the nation’s home equity – about $8 trillion. There are also more than 67 million of them.
After more than a year of false alarms, the Federal Reserve finally decided in December to begin tightening monetary policy by raising the federal funds rate. Economists are pondering the impact of this long-awaited Fed action on the U.S. economy generally and on the housing sector specifically.