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31 posts on "Mortgages"

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)

February 19, 2019

Just Released: Introducing the SCE Household Spending Survey



Introducing the SCE Household Spending Survey

Today we are releasing new data on individuals’ experiences and expectations regarding household spending. These data have been collected every four months since December 2014 as part of our Survey of Consumer Expectations (SCE). The goal of this blog post is to introduce the SCE Household Spending Survey and highlight some of its features.

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December 03, 2018

Just Released: A Closer Look at Recent Tightening in Consumer Credit



LSE_Just Released: A Closer Look at Recent Tightening in Consumer Credit


The Federal Reserve Bank of New York released results today from its October 2018 SCE Credit Access Survey, which provides information on consumers' experiences with and expectations about credit demand and credit access. The survey is fielded every four months and was previously fielded in June.

Continue reading "Just Released: A Closer Look at Recent Tightening in Consumer Credit" »

Posted by Blog Author at 11:00 AM in Credit, Demographics, Expectations, Household Finance, Mortgages | Permalink | Comments (2)

October 09, 2018

Analyzing the Effects of CFPB Oversight



LSE_Analyzing the Effects of CFPB Oversight

The Consumer Financial Protection Bureau (CFPB), created in 2011, is a key element of post-crisis U.S. financial regulation, as well as the subject of intense debate. While some have praised the agency, citing the benefits of consumer financial protection, others argue that its activities involve high compliance costs, increase uncertainty and legal risk, and ultimately reduce the availability of financial services for consumers. We present new evidence on whether the CFPB’s supervisory and enforcement activities have significantly affected the supply of mortgage credit, or had other effects on bank risk-taking and profitability.

Continue reading "Analyzing the Effects of CFPB Oversight" »

June 25, 2018

How Is Technology Changing the Mortgage Market?



LSE_How Is Technology Changing the Mortgage Market?


The adoption of new technologies is transforming the mortgage industry. For instance, borrowers can now obtain a mortgage entirely online, and lenders use increasingly sophisticated methods to verify borrower income and assets. In a recent staff report, we present evidence suggesting that technology is reducing frictions in mortgage lending, such as reducing the time it takes to originate a mortgage, and increasing the elasticity of mortgage supply. These benefits do not seem to come at the cost of less careful screening of borrowers.

Continue reading "How Is Technology Changing the Mortgage Market?" »

Posted by Blog Author at 7:00 AM in Financial Intermediation, Mortgages | Permalink | Comments (0)

May 17, 2018

Just Released: New York Fed Press Briefing Highlights Changes in Home Equity and How It’s Used



LSE_2018_Just Released: New York Fed Press Briefing Highlights Changes in Home Equity and How It’s Used

At a press briefing this morning, economists at the New York Fed focused on the evolution of housing wealth and its use as collateral. Their comments came in connection with the Center for Microeconomic Data’s release of its Quarterly Report on Household Debt and Credit for the first quarter of this year. The briefing opened with remarks from Director of Research Beverly Hirtle, who described the importance of housing wealth and how it has evolved since 2000. Bank economists then explored the data on housing wealth more deeply in this presentation, which includes three parts: (1) an overview of recent developments on household balance sheets, with a focus on housing values and mortgage debt; (2) a discussion of how housing wealth has changed over time and how it is distributed across households; and (3) facts on the changing nature of how households have used their home equity.

Continue reading "Just Released: New York Fed Press Briefing Highlights Changes in Home Equity and How It’s Used" »

Posted by Blog Author at 10:00 AM in Demographics, Household Finance, Mortgages | Permalink | Comments (0)
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