We study the exposure of mortgage borrowers in Switzerland to interest rate, income and house price risks and examine how the households’ choice of risky mortgages is related to individual interest rate expectations and risk-aversion. Our analysis is based on a unique data set of household mortgage applications from September 2012 until January 2014. Our assessment of risk exposure among mortgage borrowers in Switzerland is highly sensitive to the underlying assumptions on mortgage costs, household income and house value. Our main results suggest that the exposure of mortgage borrowers to interest rate and house price risks is limited in the medium-term. We further document that the choice of mortgage contract seems to be more influenced by affordability concerns than risk concerns. In particular, individual interest rate expectations hardly affect mortgage contract choice.
{"title":"The Exposure of Mortgage Borrowers to Interest Rate Risk, Income Risk and House Price Risk – Evidence from Swiss Loan Application Data","authors":"Martin Brown, B. Guin","doi":"10.2139/ssrn.2608823","DOIUrl":"https://doi.org/10.2139/ssrn.2608823","url":null,"abstract":"We study the exposure of mortgage borrowers in Switzerland to interest rate, income and house price risks and examine how the households’ choice of risky mortgages is related to individual interest rate expectations and risk-aversion. Our analysis is based on a unique data set of household mortgage applications from September 2012 until January 2014. Our assessment of risk exposure among mortgage borrowers in Switzerland is highly sensitive to the underlying assumptions on mortgage costs, household income and house value. Our main results suggest that the exposure of mortgage borrowers to interest rate and house price risks is limited in the medium-term. We further document that the choice of mortgage contract seems to be more influenced by affordability concerns than risk concerns. In particular, individual interest rate expectations hardly affect mortgage contract choice.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"59 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-12-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83442580","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Do households bene…t from expansionary monetary policy? We investigate how indebted households'consumption and saving decisions are aected by anticipated changes in monthly interest payments. We focus on borrowers with adjustable rate mortgages originated between 2005 and 2007 featuring an automatic reset of the interest rate after …ve years. The monthly payment due from the average borrower falls by 52 percent ($900) upon reset, resulting in an increase in disposable income totaling tens of thousands of dollars over the remaining life of the mortgage. We uncover three patterns. First, the average household increases monthly car purchases by 40 percent ($150) upon reset. Second, this expansionary eect is attenuated by the borrowers'voluntary deleveraging, as a signi…cant fraction of the increased income is deployed to accelerate debt repayment. Third, the marginal propensity to consume is signi…cantly higher for low income and underwater borrowers. To complement these household-level …ndings, we employ county-level data to provide evidence that consumption responded more to a reduction in short-term interest rates in counties with a larger fraction of adjustable rate mortgage debt. Our results shed light on the income channel of monetary policy as well as the role of debt rigidity in reducing the eectiveness of monetary policy.
{"title":"Monetary Policy Pass-Through: Household Consumption and Voluntary Deleveraging","authors":"Marco Di Maggio, A. Kermani, Rodney Ramcharan","doi":"10.2139/ssrn.2489793","DOIUrl":"https://doi.org/10.2139/ssrn.2489793","url":null,"abstract":"Do households bene…t from expansionary monetary policy? We investigate how indebted households'consumption and saving decisions are aected by anticipated changes in monthly interest payments. We focus on borrowers with adjustable rate mortgages originated between 2005 and 2007 featuring an automatic reset of the interest rate after …ve years. The monthly payment due from the average borrower falls by 52 percent ($900) upon reset, resulting in an increase in disposable income totaling tens of thousands of dollars over the remaining life of the mortgage. We uncover three patterns. First, the average household increases monthly car purchases by 40 percent ($150) upon reset. Second, this expansionary eect is attenuated by the borrowers'voluntary deleveraging, as a signi…cant fraction of the increased income is deployed to accelerate debt repayment. Third, the marginal propensity to consume is signi…cantly higher for low income and underwater borrowers. To complement these household-level …ndings, we employ county-level data to provide evidence that consumption responded more to a reduction in short-term interest rates in counties with a larger fraction of adjustable rate mortgage debt. Our results shed light on the income channel of monetary policy as well as the role of debt rigidity in reducing the eectiveness of monetary policy.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"9 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73047818","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-11-01DOI: 10.23895/KDIJEP.2014.36.4.171
I. Song
Korean Abstract: 본 논문은 주택가격이 주택가격채널을 통해 거시경제변수에 어떻게 영향을 미치는지를 분석하였다. 분석의 방법으로는 Iacoviello(2005)의 경제구조와 동태적⋅확률적 일반균형(DSGE) 모형을 한국 데이터에 적용하였다. 본 논문의 분석 결과에 따르면, 주택과 소비 간 보완성이 강할수록 주택가격 상승에 대한 소비의 반응은 더 커지면서 주택과 소비 간 동조 현상이 나타난다. 보완성이 0.42이고 LTV(주택담보대출)가 50%일 때 주택가격의 1% 상승은 소비를 0.057%p 상승시키고, 보완성이 0.52인 경우 1%의 주택가격 상승은 소비를 0.047% 상승시킨다. 한편, 주택가격이 거시경제변수와 연계성을 가지는 주요 통로는 소비의 변화이다. 주택가격이 상승하면 소비가 늘어나고, 이는 다시 거시경제 전반에 걸쳐 영향을 미치게 된다. 한편, 주택과 소비 간 기간내대체탄력성은 0.42로 추정되어 주택과 소비 간 보완성이 존재함을 확인하였다. 이 보완성은 주택가격이 소비에 미치는 영향을 증폭시키는 중요한 역할을 한다.English Abstract: This paper investigates the manner in which house prices affect macroeconomic variables through a house price channel by applying the method of Iacoviello (2005) to Korean data, and establishing a DSGE model with complementarity. This paper found that higher LTV ratio coupled with stronger complementarity results in the co-movement in both consumption and housing. For instance, the results show that when the LTV ratio and complementarity stands respectively at 50% and 0.42, an 1% rise in house prices increases consumption by 0.057%, and when the complementarity parameter increases to 0.52 with LTV remains unchanged at 50%, consumption rises by 0.047% per 1% increase in house prices. An increase in house prices leads credit constraints for borrowers to become more loose as value of a house rises as a collateral. The increase in household credit enables more consumer spending, eventually leading to increased consumption. A key link in which house prices are connected to macroeconomic variables is change in consumption. To put it simply, a rise in house prices leads to an increase in consumption, which consequently impacts the overall macro-economy. At this point, complementarity is found, in that the elasticity of intra-temporal substitution between housing and consumption is estimated at 0.42, which plays an important role in the house price channel by amplifying the effects of house prices on consumption.
Korean Abstract:本论文通过住宅价格渠道分析了住宅价格如何影响宏观经济变数。作为分析方法，将Iacoviello(2005)的经济结构和动态概率性一般均衡(DSGE)模型应用于韩国数据。根据本论文的分析结果，住宅和消费之间的互补性越强，消费对住宅价格上涨的反应就越大，出现住宅和消费之间的同步现象。如果补充性为0.42,LTV(住宅担保贷款)为50%，住宅价格上升1%，消费将上升0.057%p;如果补充性为0.52，住宅价格上升1%，消费将上升0.047%。另一方面，房价与宏观经济变数挂钩的主要渠道是消费的变化。如果房价上涨，消费就会增加，这又会对整个宏观经济产生影响。另一方面，住宅和消费之间的替代弹性被推定为0.42，确认了住宅和消费之间存在补充性。这一补充性起到了扩大住宅价格对消费影响的重要作用。english abstract:This paper investigates the manner in which house prices affect macroeconomic variables through a house price channel by applying the method of Iacoviello (2005) to Korean dataand establishing a DSGE model with complementarity。This paper found that higher LTV ratio coupled with stronger complementarity results in the co-movement in the both consumption and housing。For instance, the results show that when the LTV ratio and complementarity stands respectively at 50% and 0.42 an 1% rise in house prices increases consumption by 0.057%;and when the complementarity parameter increases to 0.52 with LTV remains unchanged at 50%， consumption rises by 0.047% per 1% increase in house prices。An increase in house prices leads credit constraints for borrowers to become more loose as value of a house rises as a collateral。The increase in household credit enables more consumer spending, eventually leading to increased consumption。A key link in which house prices are connected to macroeconomic variables is change in consumption。To put it simply, a rise in house prices leads To an increase in consumption, which consequently impacts the overall macro-economy。At this point, complementarity is found, in that the elasticity of intra-temporal substitution between housing and consumption is estimated At 0.42;which plays an important role in the house price channel by amplifying the effects of house prices on consumption。
{"title":"주택가격채널: 거시경제에 미치는 영향을 중심으로 (House Price Channel: Effects of House Prices on Macroeconomy)","authors":"I. Song","doi":"10.23895/KDIJEP.2014.36.4.171","DOIUrl":"https://doi.org/10.23895/KDIJEP.2014.36.4.171","url":null,"abstract":"Korean Abstract: 본 논문은 주택가격이 주택가격채널을 통해 거시경제변수에 어떻게 영향을 미치는지를 분석하였다. 분석의 방법으로는 Iacoviello(2005)의 경제구조와 동태적⋅확률적 일반균형(DSGE) 모형을 한국 데이터에 적용하였다. 본 논문의 분석 결과에 따르면, 주택과 소비 간 보완성이 강할수록 주택가격 상승에 대한 소비의 반응은 더 커지면서 주택과 소비 간 동조 현상이 나타난다. 보완성이 0.42이고 LTV(주택담보대출)가 50%일 때 주택가격의 1% 상승은 소비를 0.057%p 상승시키고, 보완성이 0.52인 경우 1%의 주택가격 상승은 소비를 0.047% 상승시킨다. 한편, 주택가격이 거시경제변수와 연계성을 가지는 주요 통로는 소비의 변화이다. 주택가격이 상승하면 소비가 늘어나고, 이는 다시 거시경제 전반에 걸쳐 영향을 미치게 된다. 한편, 주택과 소비 간 기간내대체탄력성은 0.42로 추정되어 주택과 소비 간 보완성이 존재함을 확인하였다. 이 보완성은 주택가격이 소비에 미치는 영향을 증폭시키는 중요한 역할을 한다.English Abstract: This paper investigates the manner in which house prices affect macroeconomic variables through a house price channel by applying the method of Iacoviello (2005) to Korean data, and establishing a DSGE model with complementarity. This paper found that higher LTV ratio coupled with stronger complementarity results in the co-movement in both consumption and housing. For instance, the results show that when the LTV ratio and complementarity stands respectively at 50% and 0.42, an 1% rise in house prices increases consumption by 0.057%, and when the complementarity parameter increases to 0.52 with LTV remains unchanged at 50%, consumption rises by 0.047% per 1% increase in house prices. An increase in house prices leads credit constraints for borrowers to become more loose as value of a house rises as a collateral. The increase in household credit enables more consumer spending, eventually leading to increased consumption. A key link in which house prices are connected to macroeconomic variables is change in consumption. To put it simply, a rise in house prices leads to an increase in consumption, which consequently impacts the overall macro-economy. At this point, complementarity is found, in that the elasticity of intra-temporal substitution between housing and consumption is estimated at 0.42, which plays an important role in the house price channel by amplifying the effects of house prices on consumption.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"41 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89594375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Utilizing new survey data collected between 2009 and 2014, this paper analyzes American households' subjective expectations on future home values. We explore the relationship between house price expectations, local economic conditions, and households' individual characteristics. We examine the heterogeneity in expectations based on panel data models. In particular, we estimate the individual- and time-specific subjective probability distributions for five-year-ahead home values. House price expectations vary significantly over time, and are positively related to past housing returns and perceived economic conditions. There is large variation in both the central tendency and the uncertainty of expectations on future home values across individuals, which is associated with several socio-economic and demographic factors. Comparing expectations and realizations shows that households only partially anticipated the large downward changes in home values in the time period 2009-2011.
{"title":"House Price Expectations","authors":"G. Niu, A. van Soest","doi":"10.2139/ssrn.2514729","DOIUrl":"https://doi.org/10.2139/ssrn.2514729","url":null,"abstract":"Utilizing new survey data collected between 2009 and 2014, this paper analyzes American households' subjective expectations on future home values. We explore the relationship between house price expectations, local economic conditions, and households' individual characteristics. We examine the heterogeneity in expectations based on panel data models. In particular, we estimate the individual- and time-specific subjective probability distributions for five-year-ahead home values. House price expectations vary significantly over time, and are positively related to past housing returns and perceived economic conditions. There is large variation in both the central tendency and the uncertainty of expectations on future home values across individuals, which is associated with several socio-economic and demographic factors. Comparing expectations and realizations shows that households only partially anticipated the large downward changes in home values in the time period 2009-2011.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79789436","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Real estate markets, including residential markets, are subject to cycles and are determined by local factors. This dependence is the result of local interactions of a variable demand and rigid short-term supply, which results from the relation between the real sector of the economy (real estate developers, construction companies, home buyers), the financial sector (providing financing for home construction and purchases) and the public sector (regulating the market).
{"title":"Recent Trends in the Real Estate Market and its Analysis, 2013, Volume 1","authors":"H. Augustyniak, Jacek Laszek, K. Olszewski","doi":"10.2139/SSRN.2648120","DOIUrl":"https://doi.org/10.2139/SSRN.2648120","url":null,"abstract":"Real estate markets, including residential markets, are subject to cycles and are determined by local factors. This dependence is the result of local interactions of a variable demand and rigid short-term supply, which results from the relation between the real sector of the economy (real estate developers, construction companies, home buyers), the financial sector (providing financing for home construction and purchases) and the public sector (regulating the market).","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"62 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74409971","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper aims to test the effect of real interest rate on housing return, by using the differencing model for eliminating the effects of other factors. Even though the relationship has been tested before, but it is hard to eliminate other factors when studying the effect of real interest rate on housing return, especially the supply factor and the trading volume factor. This is the first attempt by using the differencing method to eliminate other factors to find the net effect of real interest rate on housing return, by using a two-city comparison, of Hong Kong and Macau from 2007Q1 to 2013Q4. The result shows that real interest rate imposes a negative effect on housing return, but not the housing supply, ceteris paribus.
{"title":"Housing Price Hikes by Negative Real Interest Rate? A Differencing Model Test on the Housing Markets of Hong Kong and Macau","authors":"Chung Yim Edward Yiu","doi":"10.2139/ssrn.2461600","DOIUrl":"https://doi.org/10.2139/ssrn.2461600","url":null,"abstract":"This paper aims to test the effect of real interest rate on housing return, by using the differencing model for eliminating the effects of other factors. Even though the relationship has been tested before, but it is hard to eliminate other factors when studying the effect of real interest rate on housing return, especially the supply factor and the trading volume factor. This is the first attempt by using the differencing method to eliminate other factors to find the net effect of real interest rate on housing return, by using a two-city comparison, of Hong Kong and Macau from 2007Q1 to 2013Q4. The result shows that real interest rate imposes a negative effect on housing return, but not the housing supply, ceteris paribus.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75850946","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study estimates annual first-time homebuyer shares using 20 years of loan-level mortgage data from Fannie Mae, Freddie Mac and FHA. These shares are consistent with popular estimates from various survey data. The first-time homebuyer shares in the U.S. during the last 20 years were approximately 40 percent with a noticeable upward trend from 2007 to 2010 and a downward trend subsequently. This study also compares mortgage and borrower characteristics of first-time and repeat homebuyers. First-time homebuyers are distinct from repeat homebuyers. First-time homebuyers buy less expensive properties with smaller loans and have slightly higher preference for 30-year fixed-rate mortgages. They are also younger in age, have lower income and credit score, and higher loan-to-value and debt-to-income ratios.
{"title":"A Study of First-Time Homebuyers","authors":"S. Patrabansh","doi":"10.2139/SSRN.2533963","DOIUrl":"https://doi.org/10.2139/SSRN.2533963","url":null,"abstract":"This study estimates annual first-time homebuyer shares using 20 years of loan-level mortgage data from Fannie Mae, Freddie Mac and FHA. These shares are consistent with popular estimates from various survey data. The first-time homebuyer shares in the U.S. during the last 20 years were approximately 40 percent with a noticeable upward trend from 2007 to 2010 and a downward trend subsequently. This study also compares mortgage and borrower characteristics of first-time and repeat homebuyers. First-time homebuyers are distinct from repeat homebuyers. First-time homebuyers buy less expensive properties with smaller loans and have slightly higher preference for 30-year fixed-rate mortgages. They are also younger in age, have lower income and credit score, and higher loan-to-value and debt-to-income ratios.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88795645","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use a regression discontinuity design to investigate the effect of the Community Reinvestment Act on consumer credit outcomes using data from the Federal Reserve Bank of New York’s Consumer Credit Panel database (Equifax data) for the years 2004 to 2012. A bank’s activities in census tracts with median family incomes less than 80 percent of the metropolitan statistical area (MSA) median family income count toward a lending institution’s compliance with CRA rules. Assuming census tracts with median incomes at 79.9 percent of the MSA median are the same as census tracts at 80 percent — except for CRA eligibility — discontinuous changes in consumer credit outcomes at that threshold are evidence of the CRA’s impact. We find no statistically significant effects of the CRA on mortgages or foreclosures, either before or after the financial crisis. However, we do find evidence that CRA expanded broad measures of credit market activity: at the CRA threshold, there is a 9 percent increase in the total number of loans, an increase in the number of people covered by the Equifax data, and an increase in the fraction of individuals with a valid risk score. Despite expanded credit activity, which may increase consumers’ risk for adverse outcomes, there is no significant increase in delinquencies at the CRA threshold.
{"title":"Using Credit Reporting Agency Data to Assess the Link between the Community Reinvestment Act and Consumer Credit Outcomes","authors":"A. Muñoz, Kristin F. Butcher","doi":"10.2139/ssrn.2346308","DOIUrl":"https://doi.org/10.2139/ssrn.2346308","url":null,"abstract":"We use a regression discontinuity design to investigate the effect of the Community Reinvestment Act on consumer credit outcomes using data from the Federal Reserve Bank of New York’s Consumer Credit Panel database (Equifax data) for the years 2004 to 2012. A bank’s activities in census tracts with median family incomes less than 80 percent of the metropolitan statistical area (MSA) median family income count toward a lending institution’s compliance with CRA rules. Assuming census tracts with median incomes at 79.9 percent of the MSA median are the same as census tracts at 80 percent — except for CRA eligibility — discontinuous changes in consumer credit outcomes at that threshold are evidence of the CRA’s impact. We find no statistically significant effects of the CRA on mortgages or foreclosures, either before or after the financial crisis. However, we do find evidence that CRA expanded broad measures of credit market activity: at the CRA threshold, there is a 9 percent increase in the total number of loans, an increase in the number of people covered by the Equifax data, and an increase in the fraction of individuals with a valid risk score. Despite expanded credit activity, which may increase consumers’ risk for adverse outcomes, there is no significant increase in delinquencies at the CRA threshold.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"35 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81189764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
type="main"> This article investigates the boom and bust in U.S. homeownership rates over the 2000–2010 period. Using individual-level census data, we first estimate 204 homeownership regressions stratified by household age (21, 22, …, 89) and survey year (2000, 2005 and 2009). Shift-share methods confirm that changes in the model coefficients that reflect household attitudes, lending standards and other market conditions—but not population socioeconomics—were the primary driver of the boom and bust in homeownership over the decade. This pattern holds for nearly all age groups and is more pronounced for recent movers. Results also suggest that homeownership rates may have come close to bottoming out in early 2013 at 65% after falling roughly four percentage points from their peak in 2006. This suggests little lasting effect of the grand homeownership policy experiment of recent decades.
{"title":"The Boom, the Bust and the Future of Homeownership","authors":"S. Gabriel, S. Rosenthal","doi":"10.1111/1540-6229.12075","DOIUrl":"https://doi.org/10.1111/1540-6229.12075","url":null,"abstract":"type=\"main\"> This article investigates the boom and bust in U.S. homeownership rates over the 2000–2010 period. Using individual-level census data, we first estimate 204 homeownership regressions stratified by household age (21, 22, …, 89) and survey year (2000, 2005 and 2009). Shift-share methods confirm that changes in the model coefficients that reflect household attitudes, lending standards and other market conditions—but not population socioeconomics—were the primary driver of the boom and bust in homeownership over the decade. This pattern holds for nearly all age groups and is more pronounced for recent movers. Results also suggest that homeownership rates may have come close to bottoming out in early 2013 at 65% after falling roughly four percentage points from their peak in 2006. This suggests little lasting effect of the grand homeownership policy experiment of recent decades.","PeriodicalId":12014,"journal":{"name":"ERN: Microeconometric Studies of Housing Markets (Topic)","volume":"94 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77531118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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