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Borrowing Constraints Home Ownership And Housing Choice
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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.
Book Synopsis Low-Income Homeownership by : Nicolas P. Retsinas
Download or read book Low-Income Homeownership written by Nicolas P. Retsinas and published by Brookings Institution Press. This book was released on 2004-05-28 with total page 524 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Brookings Institution Press and Harvard University Joint Center for Housing Studies publication A generation ago little attention was focused on low-income homeownership. Today homeownership rates among under-served groups, including low-income households and minorities, have risen to record levels. These groups are no longer at the margin of the housing market; they have benefited from more flexible underwriting standards and greater access to credit. However, there is still a racial/ethnic gap and the homeownership rates of minority and low-income households are still well below the national average. This volume gathers the observations of housing experts on low-income homeownership and its effects on households and communities. The book is divided into five chapters which focus on the following subjects: homeownership trends in the 1990s; overcoming borrower constraints; financial returns to low-income homeowners; low-income loan performance; and the socioeconomic impact of homeownership.
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
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.
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.
Book Synopsis Borrowing Constraints and the Tenure Choice of Young Households by : Donald R. Haurin
Download or read book Borrowing Constraints and the Tenure Choice of Young Households written by Donald R. Haurin and published by . This book was released on 1996 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we analyze the factors that affect the tenure choice of young adults, highlighting the impact of mortgage lender imposed borrowing constraints. The data set is a panel of youth age 20-33 for the years 1985-90. Our methods differ from most prior studies in many ways including consideration of possible sample selection bias, a richer model of the stochastic error structure, better measurement of which households are bound by borrowing constraints, and a fuller consideration of the endogeneity of wealth and income. Once all changes are implemented, we find ownership tendencies to be quite sensitive to economic variables. Specifically, potential earnings, the relative cost of owning a home, and especially borrowing constraints affect the tendency to own a home. In our sample of youth, 37% of households are constrained even after choosing their loan-to-value ratio to minimize the impact of the separate wealth and income requirements. The constraints reduce the probability of ownership of these households by 10 to 20 percentage points (a third to a half) depending on the particular characteristics of the household
Book Synopsis Essays in Housing Choices and Consumer Behavior by : Li Ma
Download or read book Essays in Housing Choices and Consumer Behavior written by Li Ma and published by . This book was released on 2012 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: The third chapter "The Impact of Borrowing Constraints on the Homeownership of Chinese Households" addresses the effect of borrowing constraints in the mortgage market on the tenure choice of Chinese households. The termination of housing allocation system in 1994 is one of the most important reforms in Chinese economy during past decades. Millions of Chinese households became homeowners after this housing reform, and a market-based housing system was established. Since then, Chinese housing mortgage market has boomed and by 2005 China had become the largest residential mortgage market in Asia. This chapter examines the effect of borrowing constraints in mortgage market on the tenure choice of Chinese households. The result shows that few Chinese households are constrained by the down payment criterion. With limited lending sources and a relatively high housing price-to-income ratio, they are more likely to be constrained by the income criterion. Empirical work indicates that a one thousand dollar increase in the family's permanent income increases the likelihood of owning a housing unit by 11.8%. Moreover, highly income-constrained households are 8.6% less likely to become homeowners.
Book Synopsis Housing Choice Under Borrowing Constraints by : Kevin A. Park
Download or read book Housing Choice Under Borrowing Constraints written by Kevin A. Park and published by . This book was released on 2019 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: A dramatic decline in the maximum loan amount eligible for FHA mortgage insurance in the Salt Lake City metropolitan statistical area between 2013 and 2014 provides a natural experiment in the impact of borrowing constraints on housing decisions. Using a differences-in-differences design within a seemingly unrelated regression model, we estimate the impact of this constraint on the size and location of homes purchased by FHA borrowers. We find that borrowers likely constrained by the new loan limits purchased smaller homes with larger downpayments than similar borrowers prior to the loan limit decline. Likely constrained borrowers do not appear to compromise on location, including the quality of local schools. The net effect of the housing choices compelled by the reduction in loan limits does not appear to change the credit risk of borrowers.
Book Synopsis Understanding Consumption by : Angus Deaton
Download or read book Understanding Consumption written by Angus Deaton and published by Oxford University Press. This book was released on 1992 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: An overview of the saving and consumption patterns of households
Book Synopsis Borrowing Constraints, Housing Tenure Choice and Buy-to-let Investors by : Jan Rouwendal
Download or read book Borrowing Constraints, Housing Tenure Choice and Buy-to-let Investors written by Jan Rouwendal and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the effect of borrowing constraints in an assignment model of the housing market. When constraints apply symmetrically to all households, these lead to lower prices but unchanged housing consumption. When households can invest their own wealth and may differ in tastes, borrowing constraints will in general result in lower house prices and higher housing consumption for unconstrained households, while housing consumption of constrained households may fall. Binding borrowing constraints result in profitable arbitrage possibilities for buy-to-let investors. They can buy houses that are preferred by constrained households unable to finance them, and make them available as rental housing. In an equilibrium with free entry of such investors, house prices and the allocation of houses to households is the same as without borrowing constraints.
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.
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.
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)
Book Synopsis Regaining the Dream by : Roberto G. Quercia
Download or read book Regaining the Dream written by Roberto G. Quercia and published by Rowman & Littlefield. This book was released on 2011-07-27 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: Millions of Americans have lost their homes since the start of the recession initiated by the financial crisis of 2008–09. But is the dream of homeownership for America's working families obsolete, an aspiration from a bygone era? Regaining the Dream rejects that notion and proposes a way to strengthen the financial system while simultaneously promoting an equitable and viable American homeownership policy. For the first time, the authors of Regaining the Dream offer data-driven evidence on how the mortgage industry can serve working families in the United States, pointing the way to a pragmatic housing policy that promotes the opportunity for sustainable homeownership. Taking the reader step by step through the lending crisis and what caused it, the authors include useful and clear definitions of terms heard almost daily in news coverage. And they give a fair account of the history behind Fannie Mae and Freddie Mac and the new Dodd-Frank law, explaining what remains to be done to uphold one of the defining characteristics of the American dream.
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.
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:
Book Synopsis Well Worth Saving by : Price V. Fishback
Download or read book Well Worth Saving written by Price V. Fishback and published by University of Chicago Press. This book was released on 2013-10-04 with total page 190 pages. Available in PDF, EPUB and Kindle. Book excerpt: The urgent demand for housing after World War I fueled a boom in residential construction that led to historic peaks in home ownership. Foreclosures at the time were rare, and when they did happen, lenders could quickly recoup their losses by selling into a strong market. But no mortgage system is equipped to deal with credit problems on the scale of the Great Depression. As foreclosures quintupled, it became clear that the mortgage system of the 1920s was not up to the task, and borrowers, lenders, and real estate professionals sought action at the federal level. Well Worth Saving tells the story of the disastrous housing market during the Great Depression and the extent to which an immensely popular New Deal relief program, the Home Owners’ Loan Corporation (HOLC), was able to stem foreclosures by buying distressed mortgages from lenders and refinancing them. Drawing on historical records and modern statistical tools, Price Fishback, Jonathan Rose, and Kenneth Snowden investigate important unanswered questions to provide an unparalleled view of the mortgage loan industry throughout the 1920s and early ’30s. Combining this with the stories of those involved, the book offers a clear understanding of the HOLC within the context of the housing market in which it operated, including an examination of how the incentives and behaviors at play throughout the crisis influenced the effectiveness of policy. More than eighty years after the start of the Great Depression, when politicians have called for similar programs to quell the current mortgage crisis, this accessible account of the Home Owners’ Loan Corporation holds invaluable lessons for our own time.
