I know we're in crazy economic times here, but it's still a bit weird seeing economists suggesting that our government get into the mortgage
business at below market rates. Something else to consider is that substantial numbers of marginal homeowners, people who are notionally roughly on the fence between renting or buying, are the very people who have been or soon will be in foreclosure. These are the people who were lured into becoming buyers instead of renters by the availability of cheap credit. Going to offer them low interest loans given the hit their credit rating just took? Home ownership rates are still quite high by historic standards.