Borrowing Constraints and Homeownership Over the Recent Cycle

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Publisher :
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Borrowing Constraints and Homeownership Over the Recent Cycle by : Arthur Acolin

Download or read book Borrowing Constraints and Homeownership Over the Recent Cycle written by Arthur Acolin and published by . This book was released on 2016 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper identifies for the first time the impact of borrowing constraints in the recent decline in homeownership rates. Using data from the Survey of Consumer Finance (SCF), we measure the combined impact of income, wealth and credit constraints on homeownership outcomes over time. It has been established that credit supply loosened during the 2004-07 period and then became considerably more restricted in the wake of the Great Recession. Homeownership has also declined. However, the impact of this tightening of credit on probability of individual households to become homeowners has not previously been estimated. Using estimations of borrowing constraints going back to 2001, we identify the impact of earlier period borrowing constraints compared to those of 2010-13 on population level U.S. homeownership rates.

Borrowing Constraints and Homeownership

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ISBN 13 :
Total Pages : 9 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Borrowing Constraints and Homeownership by : Arthur Acolin

Download or read book Borrowing Constraints and Homeownership written by Arthur Acolin and published by . This book was released on 2016 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses findings relative to the impact of borrowing constraints on homeownership in the U.S. in the aftermath of the 2008 financial crisis. While homeownership declines and tightened credit are evident, the role the tightening of credit has had on the probability of individual households to become homeowners has not been previously identified. The homeownership rate in 2010-2013 is simulated to be 2.3 percentage points lower than if the constraints were set at the 2001 level.

Borrowing Constraints During the Housing Bubble

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Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Borrowing Constraints During the Housing Bubble by : Irina Barakova

Download or read book Borrowing Constraints During the Housing Bubble written by Irina Barakova and published by . This book was released on 2013 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The impact of borrowing constraints on homeownership has been well established in the literature. Wealth is most likely to restrict homeownership followed by credit and income. Using recent movers from the 1979 National Longitudinal Survey of Youth and borrowing constraint definitions commonly used in the literature, we examine the impact of these constraints on the probability of homeownership during the housing market boom between 2003 and 2007. We show that whereas the pool of financially constrained households expanded, the marginal impact of borrowing constraints associated with income and credit quality declined during this period. The constraint associated with wealth, however, continued to have a negative impact on homeownership status, all else equal. The fact that lending standards became less strict is accepted; however the impact of this on homeownership has not been previously studied. Here we find that less restrictive underwriting does appear to have reduced the impact of income and credit quality on homeownership but the impact of the wealth constraint persists.

Evidence and Innovation in Housing Law and Policy

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Publisher : Cambridge University Press
ISBN 13 : 1316738485
Total Pages : 357 pages
Book Rating : 4.3/5 (167 download)

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Book Synopsis Evidence and Innovation in Housing Law and Policy by : Lee Anne Fennell

Download or read book Evidence and Innovation in Housing Law and Policy written by Lee Anne Fennell and published by Cambridge University Press. This book was released on 2017-08-29 with total page 357 pages. Available in PDF, EPUB and Kindle. Book excerpt: No area of law and policy is more central to our well-being than housing, yet research on the topic is too often produced in disciplinary or methodological silos that fail to connect to policy on the ground. This pathbreaking book, which features leading scholars from a range of academic fields, cuts across disciplines to forge new connections in the discourse. In accessible prose filled with cutting-edge ideas, these scholars address topics ranging from the recent financial crisis to discrimination and gentrification and show how housing law and policy impacts household wealth, financial markets, urban landscapes, and local communities. Together, they harness evidence and theory to capture the 'state of play' in housing, generating insights that will be relevant to academics and policymakers alike. This title is also available as Open Access.

Housing Market Imperfections

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ISBN 13 :
Total Pages : 75 pages
Book Rating : 4.:/5 (885 download)

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Book Synopsis Housing Market Imperfections by : Jorge H. Ruiz Menjivar

Download or read book Housing Market Imperfections written by Jorge H. Ruiz Menjivar and published by . This book was released on 2013 with total page 75 pages. Available in PDF, EPUB and Kindle. Book excerpt: Homeownership is one of the most common financial aspirations of households in the United States. It has historically been an integral part of the so-called "American dream" (Bostic, Calem & Wachter, 2004). Numerous studies outline the associated positive externalities to homeownership (Glaeser & Sacerdote 2000; Glaeser & Shapiro 2003); and as a result of these multifaceted benefits, policy makers and academicians have paid careful attention to its determinants. The present study employs the 2010 Survey of Consumer Finances (SCF) to explore the relationship of housing market bar-riers and the likelihood of homeownership utilizing the Modligiani's life cycle hypothesis under the assumption of a non-frictionless market. Binomial logistic regression is used to survey the impact of the following: information asymmetry, borrowing constraints, structural barriers, housing tax preferential treatments and time preference on the prob-ability of being a homeowner. Important implications derived from this study, as it re-lates to the notion of household life cycles, might benefit multiple interested parties such as financial planners and housing professionals who are rendering recommendations to their clients, educators and researchers assisting the public in making informed choices, and governmental policymakers attempting to secure the financial well-being and inter-ests of households.

Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision

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Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (324 download)

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Book Synopsis Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision by : William C. LaFayette

Download or read book Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision written by William C. LaFayette and published by . This book was released on 1995 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earlier research has shown that lender income and wealth constraint ratios discourage homeownership. This empirical research has been based on home purchasers using an 80 percent loan-to-value (LTV) fixed-rate conventional loan. Employing the same assumption, we find that the constraints lowered the ownership rate of our 1919 young home purchasers by about 20 percentage points. However, households are not restricted to putting 20 percent down and choosing a fixed- rate loan. When we allow households to select the optimal LTV and mortgage type (adjustable or fixed-rate with Federal Housing Administration (FHA) or conventional insurance), the percentage of our sample that is credit constrained declines from 71 to 49. Moreover, the measured impact on the homeownership rate of the constraints falls to only 4 percentage points. Further, FHA loans are estimated to increase homeownership by only 0.1 to 0.2 percentage points

Borrowing Constraints, Home Ownership and Housing Choice

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Publisher :
ISBN 13 :
Total Pages : 70 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Borrowing Constraints, Home Ownership and Housing Choice by : Kristian Blickle

Download or read book Borrowing Constraints, Home Ownership and Housing Choice written by Kristian Blickle and published by . This book was released on 2018 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the impact of borrowing constraints on home ownership and housing demand by comparing the tenure choice and housing quality of consumers who receive intra-family wealth transfers to those that do not. Our analysis is based on household-level panel data providing information on the receipt of wealth transfers, changes in tenure status as well as changes in the size and quality of housing. On average we find that the receipt of a wealth transfer increases the propensity of consumers to transition from renters to home-owners by 6-8 percentage points (35% of the sample mean). Additional analyses suggest that this effect is unlikely to be driven by wealth effects and thus can be attributed to the relaxation of borrowing constraints. By contrast, wealth transfers do not increase the likelihood that existing homeowners “trade-up” to larger homes in better locations.

Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision

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Publisher :
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision by : William C. LaFayette

Download or read book Endogenous Mortgage Choice, Borrowing Constraints and the Tenure Decision written by William C. LaFayette and published by . This book was released on 2008 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earlier research has shown that lender income and wealth constraint ratios discourage homeownership. This empirical research has been based on home purchasers using an 80 percent loan-to-value (LTV) fixed-rate conventional loan. Employing the same assumption, we find that the constraints lowered the ownership rate of our 1919 young home purchasers by about 20 percentage points. However, households are not restricted to putting 20 percent down and choosing a fixed- rate loan. When we allow households to select the optimal LTV and mortgage type (adjustable or fixed-rate with Federal Housing Administration (FHA) or conventional insurance), the percentage of our sample that is credit constrained declines from 71 to 49. Moreover, the measured impact on the homeownership rate of the constraints falls to only 4 percentage points. Further, FHA loans are estimated to increase homeownership by only 0.1 to 0.2 percentage points.

The Probability of Homeownership

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Publisher :
ISBN 13 :
Total Pages : 438 pages
Book Rating : 4.:/5 (351 download)

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Book Synopsis The Probability of Homeownership by : Susan S. Collins

Download or read book The Probability of Homeownership written by Susan S. Collins and published by . This book was released on 1995 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Credit Supply and the Housing Boom

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Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (9 download)

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Book Synopsis Credit Supply and the Housing Boom by : Alejandro Justiniano

Download or read book Credit Supply and the Housing Boom written by Alejandro Justiniano and published by . This book was released on 2015 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: The housing boom that preceded the Great Recession was due to an increase in credit supply driven by looser lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical observations: the unprecedented rise in home prices and household debt, the stability of debt relative to house values, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing boom to looser borrowing constraints associated with lower collateral requirements. In fact, a slackening of collateral constraints at the peak of the lending cycle triggers a fall in home prices in our framework, providing a novel perspective on the possible origins of the bust.

Essays on Down Payment Constraint, House Price and Young People's Homeownership Behavior

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ISBN 13 :
Total Pages : 124 pages
Book Rating : 4.:/5 (681 download)

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Book Synopsis Essays on Down Payment Constraint, House Price and Young People's Homeownership Behavior by : Xun Wang

Download or read book Essays on Down Payment Constraint, House Price and Young People's Homeownership Behavior written by Xun Wang and published by . This book was released on 2010 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Chapter 1 focuses on how changes in the down payment constraint affect the wealth accumulation profile of young households. I solve a life cycle model incorporating housing as a consumption good as well as an investment good. In the model, I simulate the effect of changes in the minimum required down payment rate and changes in the house price level. One hypothesis is that changes in the borrowing constraint influence the relationship between people's first transition age from renting to owning and their saving behavior before owning. Also, changes in the down payment constraint influence the effect of house price on wealth. With a panel data set for youth age 20-33 for the years between 1996 and 1999, I conduct an empirical analysis to test the above hypotheses. By comparing my empirical results with a previous study focused on U.S. youth for the years 1985 through 1990, I find that the effect of the "probability of owning", as well as the direct impact of house price on wealth, has been reduced and becomes much less significant. Chapter 2 focuses on the effect of house price risks on young people's homeownership behavior, via relaxing the down payment constraint. Extended from the model in the first chapter, I explicitly incorporate the stochastic path of house prices in the analysis. And I simulate the effect of house price risks on people's first transition age from renters to owners and on the homeownership rate. I find house price risks have a positive effect on young people's homeownership propensities. Moreover, relaxation of the down payment constraint will amplify this positive effect. I conduct an empirical test with U.S. young households age 20-33 for the years between 1989 and 2000. I find that when controlling for state dummy variables, house price risk has a positive effect on young people's homeownership propensities. And this effect is bigger in the late 1990s with a relaxed down payment constraint than it is in an earlier period with a higher down payment requirement.

Homeownership Built to Last

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Publisher : Brookings Institution Press
ISBN 13 : 0815725655
Total Pages : 497 pages
Book Rating : 4.8/5 (157 download)

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Book Synopsis Homeownership Built to Last by : Eric S. Belsky

Download or read book Homeownership Built to Last written by Eric S. Belsky and published by Brookings Institution Press. This book was released on 2014-06-27 with total page 497 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Brookings Institution Press and Harvard University Joint Center for Housing Studies publication The ups and downs in housing markets over the past two decades are without precedent, and the costs—financial, psychological, and social—have been enormous. Yet Americans overwhelmingly still aspire to homeownership, and many still view access to homeownership as an important ingredient for building wealth among historically disadvantaged groups. This timely volume reexamines the goals, risks, and rewards of homeownership in the wake of the housing bubble and subprime lending crisis. Housing, real estate, and finance experts explore the role of government in supporting homeownership, deliberate how homeownership can be made more sustainable, and discuss how best to balance affordability, access, and risk, particularly for minorities and low income families. Contributors: Eric S. Belsky (JCHS); Raphael W. Bostic (University of Southern California); Mark Calabria (Cato Institute); Kaloma Cardwell (University of California, Berkeley); Mark Cole (Hope LoanPort); J. Michael Collins (University of Wisconsin– Madison); Marsha J. Courchane (Charles River Associates); Andrew Davidson (Andrew Davidson and Co.); Christopher E. Herbert (JCHS); Leonard C. Kiefer (Freddie Mac); Alex Levin (Andrew Davidson and Co.); Adam J. Levitin (Georgetown University Law Center); Mark R. Lindblad (University of North Carolina at Chapel Hill); Jeffrey Lubell (Abt Associates); Patricia A. McCoy (University of Connecticut School of Law); Daniel T. McCue (JCHS); Jennifer H. Molinsky (JCHS); Stephanie Moulton (Ohio State University); john a. powell (University of California–Berkeley); Roberto G. Quercia (University of North Carolina at Chapel Hill); Janneke H. Ratcliffe (University of North Carolina); Carolina Reid (University of California–Berkeley); William M. Rohe (University of North Carolina at Chapel Hill); Rocio Sanchez-Moyano (JCHS); Susan Wachter (University of Pennsylvania); Peter M. Zorn (Freddie Mac)

Housing Taxation and Capital Accumulation

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Publisher : London : Department of Economics, University of Western Ontario
ISBN 13 : 9780771421037
Total Pages : 39 pages
Book Rating : 4.4/5 (21 download)

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Book Synopsis Housing Taxation and Capital Accumulation by : Martin Gervais

Download or read book Housing Taxation and Capital Accumulation written by Martin Gervais and published by London : Department of Economics, University of Western Ontario. This book was released on 1998 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Borrowing to Live

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Publisher : Brookings Institution Press
ISBN 13 : 0815701721
Total Pages : 303 pages
Book Rating : 4.8/5 (157 download)

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Book Synopsis Borrowing to Live by : Nicolas P. Retsinas

Download or read book Borrowing to Live written by Nicolas P. Retsinas and published by Brookings Institution Press. This book was released on 2009-10-01 with total page 303 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Brookings Institution Press and Harvard University Joint Center for Housing Studies publication Americans are awash in debt, and the U.S. economy is in trouble. Credit undergirds daily life more than ever—it has become one of the defining aspects of American life, and the ramifications are becoming clearer by the day. The already considerable damage from a depressed housing market has been exacerbated by the subprime lender implosion, sending shock waves through the financial sector, international economies, and government at all levels. Most low- or moderate-income people borrow, but that should not be construed as uniformly poor judgment or lack of disciplines—Americans are not borrowing merely to keep up with the Joneses, but too often simply to stay afloat. In Borrowing to Live, the Joint Center for Housing Studies of Harvard University brings together a group of experts drawn from the best of academia, research, and public services. Together with editors Nicolas Retsinas and Eric Belsky, they dissect the worrisome current state of consumer and mortgage credit in the United States and help point the way out of the current struggles. Contributors: Michael S. Barr, Eric S. Belsky, Raphael W. Bostic, Shawn Cole, Amy Crews Cutts, Kathleen C. Engel, Ren S. Essene, Elaine Kempson, Patricia A. McCoy, William A. Merrill, Sendhil Mullainathan, Anthony Pennington-Cross, Elizabeth Renuart, Eldar Shafir, Edna R. Sawady, Jennifer Tescher, John Thompson, Peter Tufano, Susan M. Wachter

The Consumption Response to Borrowing Constraints in the Mortgage Market

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Publisher :
ISBN 13 :
Total Pages : 66 pages
Book Rating : 4.:/5 (125 download)

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Book Synopsis The Consumption Response to Borrowing Constraints in the Mortgage Market by : Belinda Tracey

Download or read book The Consumption Response to Borrowing Constraints in the Mortgage Market written by Belinda Tracey and published by . This book was released on 2021 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that relaxing borrowing constraints positively affects household consumption in addition to stimulating housing market activity. We focus on the UK Help-to-Buy (HTB) program, which provided a sudden relaxation of the down payment constraint by facilitating home purchases with only a five percent down payment. Our research design exploits geographic variation in exposure to HTB and uses administrative data on mortgages and car sales in combination with household survey data. We estimate that the program increased total home purchases by 11 percent, and the increase was driven almost entirely by first-time and young buyers. Regions that were more exposed to the program experienced a rise in non-durable consumption unrelated to the home and in loan-financed car purchases, in addition to an increase in home-related expenditures. These results are independent of changes in regional house prices. Our findings point to a further link between the housing market and household consumption that does not operate through the home purchase and housing wealth channels.

Fundamental and Speculative Demands for Housing

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Author :
Publisher : International Monetary Fund
ISBN 13 : 1498302726
Total Pages : 54 pages
Book Rating : 4.4/5 (983 download)

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Book Synopsis Fundamental and Speculative Demands for Housing by : Weicheng Lian

Download or read book Fundamental and Speculative Demands for Housing written by Weicheng Lian and published by International Monetary Fund. This book was released on 2019-03-19 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper separates the roles of demand for housing services and belief about future house prices in a house price cycle, by utilizing a feature of user-cost-of-housing that it is sensitive to demand for housing services only. Optimality conditions of producing housing services determine user-cost-of-housing and the elasticity of substitution between land and structures in producing housing services. I find that the impact of demand for housing services on house prices is amplified by a small elasticity of substitution, and demand explained four fifths of the U.S. house price boom in the 2000s.

Fundamental and Speculative Demands for Housing

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Publisher : International Monetary Fund
ISBN 13 : 1498304567
Total Pages : 54 pages
Book Rating : 4.4/5 (983 download)

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Book Synopsis Fundamental and Speculative Demands for Housing by : Weicheng Lian

Download or read book Fundamental and Speculative Demands for Housing written by Weicheng Lian and published by International Monetary Fund. This book was released on 2019-03-19 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper separates the roles of demand for housing services and belief about future house prices in a house price cycle, by utilizing a feature of user-cost-of-housing that it is sensitive to demand for housing services only. Optimality conditions of producing housing services determine user-cost-of-housing and the elasticity of substitution between land and structures in producing housing services. I find that the impact of demand for housing services on house prices is amplified by a small elasticity of substitution, and demand explained four fifths of the U.S. house price boom in the 2000s.