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52 posts on "Equitable Growth"
November 30, 2023

FHA First‑Time Buyer Homeownership Sustainability: An Update

Young African American heterosexual couple sitting on the steps of a house with front door open and cardboard moving boxes around them.

An important part of the mission of the Federal Housing Administration (FHA) is to provide affordable mortgages that both promote the transition from renting to owning and create “sustainable” homeownership. The FHA has never defined what it means by sustainability.  However, we developed a scorecard in 2018 that tracks the long-term outcomes of FHA first-time buyers (FTBs) and update it again in this post. The data show that from 2011 to 2016 roughly
21.8 percent of FHA FTBs failed to sustain their homeownership.

October 18, 2023

Borrower Expectations for the Return of Student Loan Repayment

Illustration: Headline Student Loans - Will borrowers continue to spend? Red background with illustration of a student pushing a full shopping cart.

After forty-three months of forbearance, the pause on federal student loan payments has ended. Originally enacted at the onset of the COVID-19 pandemic in March 2020, the administrative forbearance and interest waiver lasted until September 1, 2023, and borrowers’ monthly payments resumed this month. As discussed in an accompanying post, the pause on student loan payments afforded borrowers over $260 billion in waived payments throughout the pandemic, supporting borrowers’ consumption and savings over the last three years. In this post, we analyze responses of student loan borrowers to special questions in the August 2023 SCE Household Spending Survey designed to gauge the expected impact of the payment resumption on future spending growth, the risk of credit delinquency for borrowers, and the economy at large. The findings suggest that the payment resumption will have a relatively small overall effect on consumption, on the order of a 0.1 percentage point reduction in aggregate spending from August levels, and a (delayed) return of student loan delinquency rates back to pre-pandemic levels. Across groups, we see little variation in spending responses but find that low-income borrowers, female borrowers, those with less than a bachelor’s degree, and those who were not in repayment before the pandemic expect the highest likelihood of missed student loan payments.

July 6, 2023

The EGIs: Analyzing the Economy Through an Equitable Growth Lens

Dectorative image of collage of polaroids of diverse group of people portraits.

Inflation remains elevated, labor markets are close to the strongest they have been, real consumption is up year-over year, but all of these observations are with respect to averages.  Behind these macroeconomic trends can be widely varying experiences across different demographic and socioeconomic groups that make up our society. To provide researchers, practitioners, and the public with timely, regularly updated and comprehensive answers to these questions, we launched the Equitable Growth Indicators (EGIs)—a new tool to help foster the evolving discussion about economic inequality and equitable growth. To illustrate the utility of the EGIs, we provide examples of some striking differences in trends captured in the May release of the EGIs on inflation, real earnings, and real spending. More heterogeneity analysis and data are available at nyfed.org/egi.

June 22, 2023

Elevated Rent Expectations Continue to Pressure Low‑Income Households

illustration of person sitting on their suitcases outside of a house with a lock on the front door with the question: who feels most vulnerable.

The Federal Reserve Bank of New York’s 2023 SCE Housing Survey, released in April, reported some novel data about expectations for home prices, interest rates, and mortgage refinancing. While the data showed a sharp drop in home price expectations, some of the most notable findings concern renters. In this post, we take a deeper dive into how renters’ expectations and financial situations have evolved over the past year. We find that both owners and renters expect rents to rise rapidly over the next year, albeit at a slower pace than last year. Furthermore, we also show that eviction expectations rose sharply over the past twelve months, and that this increase was most pronounced for those in the lowest quartile of the income distribution.

Posted at 2:00 pm in Equitable Growth, Housing, Inflation | Permalink
May 25, 2023

Do Veterans Face Disparities in the Labor Market—And What Accounts for Them?

Illustration of veteran reading the jobs listings in a newspaper.

We continue our series on military service and consider veterans’ earnings and labor market outcomes. We find that veterans earn more than 12 percent less and are 4 percentage points (18 percent) more likely to be out of the labor force than comparable nonveterans. Interestingly, accounting for veterans’ differences from comparable nonveterans in terms of education and disability status largely explains these labor market differences.

Do Veterans Face Disparities in Higher Education, Health, and Housing?

Illustration of "how do veterans fare?" of veteran saluting with house, medical sign and college cap.

Veterans are an understudied group that forms an important part of the fabric of American society and that constitutes a significant segment of the population. In the first post of this two-part series, we will investigate how the outcomes of veteran men–in educational attainment, health, and housing–differ from those of comparable men who did not serve in the military. Looking only at men, for reasons described below, we find that relative to nonveteran men with a high school degree and a similar distribution of demographic and geographic characteristics, veterans are 7 percentage points less likely to have a college degree and are over 50 percent more likely to experience a disability. Veterans are also somewhat likelier to rent a home than to own and, as renters, pay a lower average rent, suggesting they experience lower quality housing or live in worse neighborhoods.

May 15, 2023

First‑Time Buyers Did Not Drive Strong House Price Appreciation in 2021

Photo of family moving into their first home; taking boxes out of a truck. Parents and two daughters.

In May 2022, Sam Khater—chief economist for Freddie Mac—argued that a surge in first-time buyers had been an important driver of the housing market the previous year. In contrast, using data from the New York Fed Consumer Credit Panel, we find that the share of home purchases by first-time buyers fell in 2021. This suggests that other factors were important to the rapid increase in house prices in 2021. 

Posted at 7:00 am in Equitable Growth, Housing, Inflation | Permalink
February 27, 2023

Does the CRA Increase Household Access to Credit?

Illustration: bank building with arrow pointing toward row of community houses. Question below: Is household borrowing impacted?

Congress passed the Community Reinvestment Act (CRA) in 1977 to encourage banks to meet the needs of borrowers in the areas in which they operate. In particular, the Act is focused on credit access to low- and moderate-income communities that had historically been subject to discriminatory practices like redlining.

January 18, 2023

Rural Households Hit Hardest by Inflation in 2021‑22

Illustration: Inflation: does location matter? A U.S. map with a pin dropped in the center.

To conclude our series, we present disparities in inflation rates by U.S. census region and rural status between June 2019 and the present. Notably, rural households were hit by inflation the hardest during the 2021-22 inflationary episode. This is intuitive, as rural households rely on transportation, and especially on motor fuel, to a much greater extent than urban households do. More generally, the recent rise in inflation has affected households in the South more than the national average, and households in the Northeast by less than the national average, though this difference has decreased in the last few months. Once again, these changes in inflation patterns can be explained by transportation inflation driving a large extent of price rises during 2021 and much of 2022, with housing and food inflation lately coming to the fore.

Posted at 11:02 am in Equitable Growth, Inequality, Inflation | Permalink

Young, Less Educated Faced Higher Inflation in 2021—But Gaps Now Closed

Illustration: Inflation: what's changed? short arrow with college grad at the top; higher arrow with a non grad at the top.

We continue our series on inflation disparities by looking at disparities in inflation rates by educational attainment and age for the period June 2019 to the present. Remarkably, we find that disparities by age and education are considerably larger than those by income and are similar in size to those by race and ethnicity, both explored in our previous post. Specifically, during the inflationary period of 2021-22, younger people and people without a college degree faced the highest inflation, with steadily widening gaps relative to the overall average between early 2021 and June 2022, followed by a rapid narrowing of the gaps and a reversal of some of them by December 2022. This pattern arises primarily from a greater share of the expenditures of younger people and people without a college degree being devoted to transportation—particularly used cars and motor fuel—which led the 2021 inflationary episode but has since converged to general inflation.

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.

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