Edward Pinto sat in the dining room of the American Enterprise Institute, the nonpartisan nonprofit and research institution where he has worked for nearly 16 years. He sat with a single glass of iced tea in a space overflowing with abundance — from a kitchen that smells of freshly brewed coffee and boasts a made-to-order omelet station to a wood-paneled dining space anchored with a marble fireplace and paintings, including a gold-framed portrait of Abraham Lincoln.
After only a year as one of the institute’s resident fellows, Pinto soon became a senior fellow and director of the organization’s housing center. A lawyer and graduate of the University of Illinois Urbana-Champaign and Indiana University Bloomington, the role has been his longest yet, including a few years spent as an executive vice president and chief credit officer at mortgage buyer Fannie Mae.
Pinto came to our morning meeting prepared to showcase the organization’s latest housing research. For him, data-driven research, independent information with the potential to influence and create change, gets him out of bed in the morning.
“Data, information, knowledge, action — I am always action,” Pinto said.
With six decades of housing policy research in his arsenal, Pinto shared tips for aspiring homeowners and buyers searching for their next residence.
This interview has been edited and condensed for clarity.
Housing affordability is a big challenge for many aspiring buyers. Where should people start?
Save. If you’re paying for $5 lattes, don’t tell me you don’t have any money. These are choices. As my mother said, "Pay yourself first. Spend what’s left." People spend what they get, and they think about savings later.
Many buyers keep waiting for lower mortgage rates. What’s your advice on buying at a time when the 30-year, fixed-rate mortgage hovers around 6.76% with Freddie Mac?
Don’t try to guess the market. All I know is today is today. I know what interest rates are today. I know what they were yesterday. I have no idea what they will be tomorrow. Do I like rates today compared to where they were last week or last month? If the answer is "yes," I’ll go out for more debt. If I don’t like it, then I’ll go for less. I don’t try to guess the market in the future. I have bought houses when interest rates were 9% and when they were 11% and sold houses when they were 16%.
What should a buyer prioritize when looking to close and why?
If you’re going to do anything, do it with a 20-year loan term. Why? Because your default rates are going to be roughly half that of a 30-year. You’re going to have a lot more equity at the end of five years than you would with a 30-year loan. You’re going to have a lot more resilience.
When you have time to read, what’s your go-to book you like to return to?
I love reading “Pride and Prejudice.” I have probably read it four or five times. I like how the story unfolds with Mr. Darcy and Elizabeth Bennet. It’s the whole thing of how they start as antagonists and slowly fall in love without realizing and eventually get married. He perseveres. He doesn’t take "no" for an answer.