(ReclaimingAmerica.net) – Federal Reserve Chairman Jerome Powell disclosed that banks and insurance companies are pulling out of risky areas and that mortgages will be impossible to obtain within 10 to 15 years.
This alarming prediction stems from banks’ and insurers’ retreat from high-risk areas, particularly those vulnerable to coastal and wildfire-related threats.
As climate change increases the frequency and severity of natural disasters, insurers are canceling policies and withdrawing from coastal and fire-prone areas, leaving homeowners vulnerable and unable to secure mortgages.
“Those banks and insurance companies are pulling out of areas, coastal areas and … areas where there are a lot of fires,” Powell stated, underlining the gravity of the situation.
“If you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage,” he added.
This crisis is already unfolding. State Farm, a major insurer, recently canceled policies in Los Angeles’ Pacific Palisades before wildfires occurred, leaving homeowners scrambling for coverage.
The implications of this insurance crisis extend far beyond individual homeowners.
Powell warned, “It will fall on homeowners, residents, but also on state and local governments. What you see happening is that where private insurance is going away, states are stepping in because they want those areas to remain prosperous.”
Moreover, Powell’s suggestion of a system that spreads risk across the population, similar to a Medicare-for-all approach, to keep insurance premiums affordable, reeks of socialism.
This proposed solution would unfairly burden responsible homeowners in low-risk areas with the costs of those choosing to live in high-risk regions.
Powell’s testimony also revealed the Federal Reserve’s inability to effectively address the housing affordability crisis.
He admitted, “There’s a short-term problem that will go away in the coming years, but there’s a longer-term problem with housing affordability, and that’s going to be something that’s not within our authorities or powers to affect.”
This admission of powerlessness from one of the nation’s top financial regulators is deeply concerning.
Without change, mortgage availability will continue to decline, casting a long shadow over future U.S. homeownership.
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