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30 posts on "Housing"

August 24, 2015

Rethinking Mortgage Design

John Campbell, Andreas Fuster, David Lucca, Stijn Van Nieuwerburgh, and James Vickery

LSE_2015_mortgage-redesign_vickery_460a_art


Because mortgages make up the majority of household debt in most developed countries, mortgage design has important implications for macroeconomic policy and household welfare. As one example, most U.S. mortgages have fixed interest rates—if interest rates fall, existing borrowers need to refinance to lower their interest payments. In practice, households are often slow to refinance, or may not be able to do so. As a result, the transmission of U.S. monetary policy is dampened relative to countries like the United Kingdom where mortgage rates on most loans adjust automatically with short-term interest rates. In this post, we discuss some of the key takeaways from a recent conference where policymakers, academics, practitioners, and other experts convened to discuss mortgage design and consider possible mortgage market innovations.

Continue reading "Rethinking Mortgage Design" »

Posted by Blog Author at 7:00 AM in Household Finance, Housing | Permalink | Comments (1)

August 13, 2015

Just Released: Releveraging the Consumer Credit Panel with Two New Charts



Household-credit-debt-450

Our Consumer Credit Panel, which is based on data from the Equifax credit reporting agency, first arrived at the New York Fed in 2009, and our very first Quarterly Report on Household Debt and Credit was published in August 2010, five years ago this month. We’ve continued to produce the same report, with very few changes, since the report’s initial release. However, with today’s release of the report for the second quarter of 2015, we’re beginning to make some changes, starting with two new charts that provide granularity on mortgage loan originations. These data are identical to the originations data that we’ve released previously, but we now report origination volume by credit score groups. The new charts’ form will be familiar to those who have seen our earlier work on auto loans or the U.S. Economy in a Snapshot, and will leverage some of the detail that we have in our dataset on new extensions of credit and underwriting standards.

Continue reading "Just Released: Releveraging the Consumer Credit Panel with Two New Charts" »

Posted by Blog Author at 11:15 AM in Household Finance, Housing | Permalink | Comments (0)

July 15, 2015

A Discussion of Thomas Piketty’s Capital in the Twenty-First Century: Does More Capital Increase Inequality?



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Second in a two-part series


My aim in the second post of this series on Thomas Piketty’s Capital in the Twenty-First Century is to talk about the economist’s research accomplishment in reconstructing capital-output ratios for developed countries from the Industrial Revolution to the present and using them to explain why wealth inequality will rise in developed countries. I will then provide a critical discussion of his interpretation of the history of capital in the developed world. Finally, I’ll end by discussing Piketty’s main policy proposal: the global tax on capital.

Continue reading "A Discussion of Thomas Piketty’s Capital in the Twenty-First Century: Does More Capital Increase Inequality?" »

Posted by Blog Author at 7:00 AM in Economic History, Housing, Macroecon | Permalink | Comments (0)

July 08, 2015

How Sensitive Is Housing Demand to Down Payment Requirements and Mortgage Rates?



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When a household is looking to buy a home, financial considerations are usually very important. In particular, in deciding “how much house to buy,” a household must ponder how large a down payment it can make at the time of purchase, and also how much it can afford to pay each month. The minimum required down payment and the interest rate on available mortgages (which determines the monthly payment) are key elements in the decision. When these variables change, this likely affects the price a household is willing and able to pay for a home, and thus the housing market overall. However, measuring the strength of these effects is notoriously difficult. In this post, which is based on a recent staff report, we describe a novel approach to measure these effects. We find that a change in down payment requirements tends to have a large effect on housing demand—households’ willingness to pay for a given home—especially for current renters, whereas the effects of a change in the mortgage rate are modest.


Continue reading "How Sensitive Is Housing Demand to Down Payment Requirements and Mortgage Rates? " »

Posted by Blog Author at 7:00 AM in Household Finance, Housing | Permalink | Comments (1)

May 28, 2015

Just Released: 2015 SCE Housing Survey Shows Households Optimistic about Housing Market



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The Federal Reserve Bank of New York today released results from its 2015 SCE Housing Survey. The survey, administered to 1,205 U.S. household heads in February, is a follow-up to the one conducted in February 2014. The purpose of the effort is to collect rich and high-quality information on consumers’ experiences and expectations regarding housing. The survey collects data on individuals’ perceptions and expectations of the growth in home prices, intentions regarding moving or buying a new home, and their access to credit, among other things.

Continue reading "Just Released: 2015 SCE Housing Survey Shows Households Optimistic about Housing Market" »

Posted by Blog Author at 10:15 AM in Household Finance, Housing | Permalink | Comments (0)

May 12, 2015

Just Released: Mortgage Borrowing among Most Creditworthy Abates



Household-credit-debt-450

Today’s release of the New York Fed’s Quarterly Report on Household Debt and Credit for the first quarter of 2015 reports a flattening in household debt balances. The slow growth in debt balances has left many wondering about the dynamics behind this change—who is borrowing, and who is paying down their balances? Thus, we use the same data set, the New York Fed Consumer Credit Panel (which is itself based on Equifax credit data) to identify the changes in balances by credit score, updating a post from last year with more recent data and also providing an in-depth look at the change in mortgage balances.

Continue reading "Just Released: Mortgage Borrowing among Most Creditworthy Abates " »

Posted by Blog Author at 11:15 AM in Household Finance, Housing | Permalink | Comments (0)

February 04, 2015

Household Formation within the “Boomerang Generation”



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Young Americans’ living arrangements have changed strikingly over the past fifteen years, with recent cohorts entering the housing market at much lower rates and lingering much longer in their parents’ households. The New York Times Magazine reported this past summer on the surge in college-educated young people who “boomerang” back to living with their parents after graduation. Joining that trend are the many other members of this cohort who have never left home, whether or not they attend college. Why might young people increasingly reside with their parents? They may be unable to find employment, they may be saving their income to pay down increasing levels of student debt, or they may be unable to afford the rent for an apartment in the face of lower income or higher housing prices.

Continue reading "Household Formation within the “Boomerang Generation”" »

Posted by Blog Author at 7:00 AM in Household Finance, Housing | Permalink | Comments (0)

September 08, 2014

Why Aren’t More Renters Becoming Homeowners?



Recent activity in the U.S. housing market has been widely perceived as disappointing. For instance, sales of both new and existing homes were about 5 percent lower over the first half of 2014 than over the first half of 2013. From a longer-term perspective, a striking statistic is that the homeownership rate in the United States has fallen from 69 percent in 2005 to 65 percent in the first quarter of 2014. This decrease in homeownership is particularly pronounced for younger households, implying that many of them are remaining renters for longer than in the past. In this post, we use survey evidence to shed some light on what is driving this sluggish transition from renting to homeownership.

Continue reading "Why Aren’t More Renters Becoming Homeowners? " »

Posted by Blog Author at 2:00 PM in Household Finance, Housing | Permalink | Comments (6)

June 26, 2014

From Our Archive: Student Debt in Perspective

The Editors

We read with interest a new Brookings Institution report, Is a Student Loan Crisis on the Horizon?, assessing the weight of the student debt burden. It was also pleasing to see the New York Times, several of our Twitter followers, and others citing work on this blog in counterpoint.

Continue reading "From Our Archive: Student Debt in Perspective" »

Posted by Blog Author at 3:00 PM in Education, Household Finance, Housing, Labor Economics | Permalink | Comments (0)

May 13, 2014

Just Released: Young Student Loan Borrowers Remained on the Sidelines of the Housing Market in 2013

Meta Brown, Sydnee Caldwell, and Sarah Sutherland

Last year, our blog presented results from the FRBNY Consumer Credit Panel (CCP) indicating that, at a time of unprecedented growth in student debt, student borrowers were collectively retreating from housing and auto markets. In this post, we compare our 2012 findings to the news for 2013.

Continue reading "Just Released: Young Student Loan Borrowers Remained on the Sidelines of the Housing Market in 2013" »

Posted by Blog Author at 11:15 AM in Economic History, Education, Household Finance, Housing | Permalink | Comments (3)
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