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Mortgage rates may still be hogging the blame for America’s housing slump, but Bank of America CEO Brian Moynihan isn’t buying it—not entirely, anyway. While the spotlight’s been stuck on homeowners clinging to their 3% rates like vintage baseball cards, Moynihan says the real drag on the market isn’t who won’t sell. It’s who can’t afford to buy.
“There’s 130 odd million households in America,” he said during a December 28 appearance on Face the Nation. “Half of them don’t have a mortgage. This whole lock-in question is not even a relevant question. They rent, and so you got to bring—rental affordability is a question.”
So while the headlines scream “locked in,” Moynihan is waving at the other half of the country—millions of renters and mortgage-free homeowners—who aren’t sitting on sub-4% loans at all. For them, there’s no golden handcuff. There’s just a housing market that’s become harder to crack than a crab leg with no butter.
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“There’s a universal housing shortage,” he added. “For so many years it’s been hard to get housing permitted… you got to build supply, and you got to get permitting done. That is probably the solution.”
Translation: there aren’t enough homes to go around. And even if rates drop half a percent, it won’t fix the math. “Moving mortgage rates 50 basis points will not be a huge change,” Moynihan said. Especially when, as he points out, those with rock-bottom mortgages aren’t going anywhere fast. “When you have a bunch of people with 3% mortgage rates, that’s not going to be changed.”
But here’s where it gets interesting. Moynihan doesn’t think we should be waiting for the glory days of dirt-cheap debt to return. “We do not want to have an economy that has to have that low rate structure again… that means we’re not growing, we’re not successful, and we’re probably offsetting a recession.”
So, if the housing market isn’t going to be saved by a Fed miracle, and homebuilders are still tangled up in red tape, what does that mean for people trying to build wealth—or just keep up?
That’s where rentals come back into the picture, but not just as places to live. With demand for rental housing still strong and supply lagging behind, some are flipping the script—earning income from the housing squeeze rather than being crushed by it. One way? Buying into the very thing renters are paying for.
