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Well, that settles it. I have to go to Cologne now. What a beautiful photo.
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From: Germany Idea: Minimize Mortgages Germany has one of the lowest homeownership rates among wealthy nations—around 46 percent, vs. two-thirds in the U.S.—and also one of the most stable housing markets. Prices of owner-occupied housing in Germany are up 9 percent since 2003, according to the Association of German Pfandbrief Banks. What’s the German formula? Housing is less vulnerable to booms and busts because only highly qualified buyers can get a mortgage. Down payments are usually at least 20 percent, often 40 percent. Mortgage interest is not tax-deductible, as it is in the U.S., which also discourages excessive leverage. Germans are justly proud of their Pfandbrief, an ultrasafe bond whose collateral is a set of standardized mortgages whose loan-to-value ratio can’t exceed 60 percent. The bank that sells a mortgage-backed Pfandbrief to investors retains all the risk of default, giving it the incentive to underwrite cautiously. The lesson for the U.S.? Tougher lending rules would help lower the risk of another housing crash. And in the long run, Americans may have to accept a lower homeownership rate to pay for taking the boom and bust out of the market.
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What the American Midwest can learn from Germany about high-speed and freight rail coexistence.
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Derek wanders the Internet
I find Internet things that I like, so I post them here. Twitter: @derekpetey. Follow via RSS or visit my archive.
