226 posts on "Household Finance"
August 1, 2016
Which Households Have Negative Wealth?
At some point in its life a household’s total debt may exceed its total assets, in which case it has “negative wealth.” Even if this status is temporary, it may affect the household’s ability to save for durable goods, restrict access to further credit, and may require living in a state of limited consumption. Detailed analysis of the holdings of negative-wealth households, however, is a topic that has received little attention. In particular, relatively little is known about the characteristics of such households or about what drives negative wealth. A better understanding of these factors could also prove valuable in explaining and forecasting the persistence of wealth inequality. In this post, we take advantage of a special module of the Survey of Consumer Expectations to shed light on this issue.
July 18, 2016
Forecasting Interest Rates over the Long Run
In a previous post, we showed how market rates on U.S. Treasuries violate the expectations hypothesis because of time-varying risk premia.
Posted at 7:00 am in Expectations, Financial Markets, Fiscal Policy, Forecasting, Household Finance, Inflation, Treasury | Permalink | Comments (1)
June 20, 2016
Risky Business: Government Mortgage Insurance Programs
W. Scott Frame, Kristopher Gerardi, and Joseph Tracy Editors’ note: The column headings in the final table in this post have been corrected from an earlier version. Homeownership has long been a U.S. public policy goal. One of the many ways that the federal government subsidizes homeownership is through mortgage insurance programs operated by the […]
June 6, 2016
Is Health Insurance Good for Your Financial Health?
What is the purpose of health care? What is the purpose of health insurance? When people fall ill, they seek health care in order to get better. But insurance has a slightly different function: Its main role is not to protect our health per se, but to protect our finances. For most people, lifetime health expenditures are quite low. However, some people have enormous health costs owing to major illnesses or health conditions. And this is where health insurance comes in—its goal (like that of any other form of insurance) is to protect these individuals against large, and sometimes ruinous, health expenditures. Has the recent health reform served this purpose?
May 24, 2016
Just Released: Hints of Increased Hardship in America’s Oil‑Producing Counties
Andrew F. Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw Today, the New York Fed released the Quarterly Report on Household Debt and Credit for the first quarter of 2016. Overall debt saw one of its larger increases since deleveraging ended, while delinquency rates for the United States continued to improve and remain […]
May 11, 2016
Household Consumption Mobility over the Life‑Cycle
Commonly used metrics of inequality and mobility attempt to capture how household (or individual) income compares to the rest of the population and how persistent that income is over the life cycle.
March 7, 2016
Banking Deserts, Branch Closings, and Soft Information
U.S. banks have shuttered nearly 5,000 branches since the financial crisis, raising concerns that more low-income and minority neighborhoods may be devolving into “banking deserts” with inadequate, or no, mainstream financial services.
Posted at 7:00 am in Banks, Crisis, Financial Institutions, Household Finance, Regulation | Permalink
February 29, 2016
The “Cadillac Tax”: Driving Firms to Change Their Plans?
Since the 1940s, employers that provide health insurance for their employees can deduct the cost as a business expense, but the government does not treat the value of that coverage as taxable income.
February 25, 2016
Just Released: Five New Data Series on Consumer Expectations
Today, the New York Fed is introducing a number of new data series and interactive charts reporting findings from its Survey of Consumer Expectations (SCE).
February 24, 2016
The Graying of American Debt
The U.S. population is aging and so are its debts. In this post, we use the New York Fed Consumer Credit Panel, which is based on Equifax credit data, to look at how debt is changing as baby boomers reach retirement age and millennials find their footing. We find that aggregate debt balances held by younger borrowers have declined modestly from 2003 to 2015, with a debt portfolio reallocation away from credit card, auto, and mortgage debt, toward student debt. Debt held by borrowers between the ages of 50 and 80, however, increased by roughly 60 percent over the same time period. This shifting of debt from younger to older borrowers is of obvious relevance to markets fueled by consumer credit. It is also relevant from a loan performance perspective as consumer debt payments are being made by older debtors than ever before.
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