INFLATION AND THE HOUSING MARKET: PROBLEMS AND POTENTIAL SOLUTIONS.

The rising and variable rate of inflation over the past ten years has seriously destabilized the housing sector. The standard mortgage appears to be a major culprit given its limitations as a financing instrument in such periods of inflation. This article provides a review of the M. I. T. mortgage study sponsored by the U. S. Department of Housing and Urban Development and the Federal Home Loan Bank Board. The authors explain the shortcomings of the standard mortgage, describe five viable, alternative mortgage designs and propose a provocative package of recommendations.