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56 posts on "Housing"

May 22, 2019

Just Released: Press Briefing on the Evolution and Future of Homeownership



The New York Fed today held a press briefing on homeownership in the United States, in connection with its release of the 2019 Survey of Consumer Expectations Housing Survey. The briefing opened with remarks from New York Fed President John Williams, who provided commentary on the macroeconomic outlook and summarized the prospects for homeownership. He noted that the labor market remains very strong and that there seems to be little evidence of inflationary pressures, meaning that the economy is on a healthy growth path.

Continue reading "Just Released: Press Briefing on the Evolution and Future of Homeownership" »

Posted by Blog Author at 11:01 AM in Foreclosure, Household Finance, Housing, Mortgages | Permalink | Comments (0)

April 17, 2019

Did Tax Reform Raise the Cost of Owning a Home?



HOUSING SERIES: Post 5 of 5
LSE_2019_Did Tax Reform Raise the Cost of Owning a Home?

The 2018 slowdown in the housing market has been a subject of intense interest to the press and policymakers, including articles reporting a slowing in house price growth and a decline in home construction. Today we follow up on our colleagues’ research on whether the Tax Cut and Jobs Act of 2017 (TCJA) has contributed to a slowdown in the housing market, looking closely at what price signals tell us about the trade-off between owning and renting.

Continue reading "Did Tax Reform Raise the Cost of Owning a Home?" »

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

April 15, 2019

Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?



HOUSING SERIES: Post 4 of 5
LSE_2019_Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?

From the fourth quarter of 2017 through the third quarter of 2018, the average contract interest rate on new thirty-year fixed rate mortgages rose by roughly 70 basis points—from 3.9 percent to 4.6 percent. During this same period, there was a broad-based slowing in housing market activity with sales of new single-family homes declining by 7.6 percent while sales of existing single-family homes fell by 4.6 percent. Interestingly though, these declines in home sales were larger than in the two previous episodes when mortgage interest rates rose by a comparable amount. This post considers whether provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) might have also contributed to the recent decline in housing market activity.

Continue reading "Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?" »

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

April 12, 2019

The Sustainability of First-Time Homeownership



HOUSING SERIES: Post 3 of 5
LSE_2019_housing2-characteristics-first-time-buyer_lee_460_art

In this post we take up the important question of the sustainability of homeownership for first-time buyers. The evaluation of public policies aimed at promoting the transition of individuals from renting to owning should depend not only on the degree to which such policies increase the number of first-time buyers, but also importantly on whether these new buyers are able to sustain their homeownership. If a buyer is unprepared to manage the financial responsibilities of owning a home and consequently must return to renting, then the household may have made little to no progress in wealth accumulation. Despite the importance of sustainability, to date there have been no efforts at measuring the sustainability of first-time homeownership. We provide an example of a first-time homebuyer sustainability scorecard.

Continue reading "The Sustainability of First-Time Homeownership" »

Posted by Blog Author at 7:00 AM in Household, Household Finance, Housing, Mortgages | Permalink | Comments (2)

April 10, 2019

Who’s on First? Characteristics of First-Time Homebuyers



HOUSING SERIES: Post 2 of 5
LSE_2019_housing2-characteristics-first-time-buyer_lee_460_art

In our previous post, we presented a new measure of first-time homebuyers. In this post, we use this improved measure to describe the characteristics of first-time buyers and how those characteristics change over time. Having an accurate assessment of first-time buyers is important given that the aim of many housing policies is to support the transition from renting to owning. A proper assessment of these housing policies requires an understanding of the impact of these policies on the share of first-time buyers and the characteristics of these buyers. Our third post will directly examine the sustainability of homeownership by first-time buyers.

Continue reading "Who’s on First? Characteristics of First-Time Homebuyers" »

Posted by Blog Author at 7:00 AM in Credit, Forecasting, Household, Household Finance, Housing, Mortgages | Permalink | Comments (2)

April 08, 2019

A Better Measure of First-Time Homebuyers



HOUSING SERIES: Post 1 of 5
LSE_2019_A Better Measure of First-Time Homebuyers

Much of the concern about affordable homeownership has focused on first-time buyers. These buyers, who are often making the transition from renting to owning, can find it difficult to save to meet down-payment requirements; this is particularly true in those areas where rent takes up a significant portion of a household’s monthly income. In contrast to first-time buyers, repeat buyers can typically rely on the equity in their current house to help fund the down payment on a trade-up purchase; they also have an easier time qualifying for a new mortgage if they’ve successfully made payments on a prior mortgage, thereby improving their credit score. Despite the policy focus on first-time buyers, reliable data on these buyers do not exist. In this first of three posts, we introduce a better measure of first-time buyers and examine the dynamics of this group over the past seventeen years. In our next post, we will describe the characteristics of first-time buyers. We will conclude this part of the housing series by examining the sustainability of homeownership for first-time buyers.

Continue reading "A Better Measure of First-Time Homebuyers" »

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

April 18, 2018

Just Released: Is Housing a Good Investment? Where You Stand Depends on Where You Sit



LSE_Just Released: Is Housing a Good Investment? Where You Stand Depends on Where You Sit

Home price growth expectations remained stable relative to last year, according to the Federal Reserve Bank of New York’s 2018 SCE Housing Survey. Respondents expect mortgage rates to rise over the next year, and perhaps as a result, the share of owners who expect to refinance their mortgages over the next year declined slightly. In addition, homeowners view themselves as more likely to make investments in their homes, and renters’ perceived access to mortgage credit has tightened somewhat. Although the majority of households continue to view housing as a good financial investment, there are some persistent and large differences across regions in the pervasiveness of this view, as this post will discuss.

Continue reading "Just Released: Is Housing a Good Investment? Where You Stand Depends on Where You Sit" »

Posted by Blog Author at 11:00 AM in Expectations, Housing | Permalink | Comments (0)

April 11, 2018

How Will the New Tax Law Affect Homeowners in High Tax States? It Depends



LSE_How Will the New Tax Law Affect Homeowners in High Tax States? It Depends

The Tax Cuts and Jobs Act of 2017 (TCJA) introduces significant changes to the federal income tax code for individuals and businesses. Several provisions of the new tax law are particularly significant for the owner‑occupied housing market. In this blog post, we compare the federal tax liability and the marginal after-tax cost of mortgage interest and property taxes under the old and new tax codes for a wide range of hypothetical recent home buyers in a high tax state. We find that impacts vary substantially along the income/home price distribution.

Continue reading "How Will the New Tax Law Affect Homeowners in High Tax States? It Depends" »

Posted by Blog Author at 7:00 AM in Fiscal Policy, Household Finance, Housing | Permalink | Comments (3)

April 02, 2018

Quantities and Prices during the Housing Bust



LSE_2018_Quantities and Prices during the Housing Bust

The recent U.S. housing crisis featured explosive growth and collapse of house prices at the national level, with substantial boom-bust pattern variation at the local level. What is less commonly known in the housing market is the behavior of housing quantities. While measures of supply and inventory play an important role in understanding markets, quantity data in housing is traditionally limited to national aggregates. Using a rich new data set of homes listed for sale across a wide range of U.S. housing markets, this post explores whether the collapse in prices from 2006 to 2009 owed more to a flood of houses on the market (higher supply) or a dearth of sales (lower demand).

Continue reading "Quantities and Prices during the Housing Bust" »

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

February 14, 2018

Landing a Jumbo Is Getting Easier



LSE_2018_Landing a Jumbo Is Getting Easier

The United States relies heavily on securitization for funding residential mortgages. But for institutional reasons, large mortgages, or “jumbos,” are more difficult to securitize, and are instead usually held as whole loans by banks. How does this structure affect the pricing and availability of jumbo mortgages? In this post we show that the supply of jumbo mortgages has improved in recent years as banks have become more willing to take on mortgage credit risk on their own balance sheets.

Continue reading "Landing a Jumbo Is Getting Easier" »

Posted by Blog Author at 7:00 AM in Credit, Household Finance, Housing, Mortgages | Permalink | Comments (2)
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