Search Results
Working Paper
Aging and Housing Returns
Older home sellers receive lower returns than younger home sellers. Homes sold by older people have fewer major renovations but higher rates of poor upkeep. Older sellers are also more likely to sell off-MLS (“pocket listings”) and to sell to investors, leading to lower prices. These patterns suggest that older sellers may be disproportionately disadvantaged by agents’ incentive to maximize fees through generating high sales volume instead of maximizing sale prices. Age-related cognitive decline makes the elderly more vulnerable. For causal evidence, we show that reforms making private ...
Discussion Paper
The New York Fed Consumer Credit Panel: A Foundational CMD Data Set
As the Great Financial Crisis and associated recession were unfolding in 2009, researchers at the New York Fed joined colleagues at the Board of Governors and Philadelphia Fed to create a new kind of data set. Household liabilities, particularly mortgages, had gone from being a quiet little corner of the financial system to the center of the worst financial crisis and sharpest recession in decades. The new data set was designed to provide fresh insights into this part of the economy, especially the behavior of mortgage borrowers. In the fifteen years since that effort came to fruition, the ...
Discussion Paper
Who Is Still on First? An Update of Characteristics of First‑Time Homebuyers
Following the COVID-19 health crisis, home prices and mortgage rates rose sharply. This created concerns that first-time homebuyers (FTBs) would be disadvantaged and would lose ground. Earlier this year, we documented that the share of purchase mortgages by FTBs, as well as their share of home purchases, have actually increased slightly over the past couple of years. It appears that FTBs are holding their own in this challenging housing market. This raises the question of whether the characteristics of FTBs have changed. In a 2019 post, we described the characteristics of these buyers over ...
Discussion Paper
Learning by Bouncing: Overdraft Experience and Salience
Overdraft credit, when banks and credit unions allow customers to spend more than their checking account holds, has many critics. One fundamental concern is whether overdrafts are salient—whether account holders know how often they overdraw and how much it costs them. To shed light on this question, we asked participants in the New York Fed’s Survey of Consumer Expectations about their experience with and knowledge of their banks’ overdraft programs. The large majority knew how often they overdrew their account and by how much. Their overdraft experience, we find, begets knowledge; of ...
Working Paper
The Effects of Wildfire and Distant Air Pollution on Household Financial Well-Being
While exposure to wildfire smoke is adverse to human health, little is known about related impacts on household economics. In this paper, we link granular wildfire burn, smoke plume, air pollution, and consumer credit data to estimate the impact of extreme wildfire and related dispersed air pollution effects on consumer financial health. We find material effects including increased credit card and personal loan delinquencies among households distant from the burn perimeter but exposed to high levels of pollution. Further analysis of confidential supervisory data reveals elevated spending and ...
Working Paper
Who Bears Climate-Related Physical Risk?
This paper combines data on current and future property-level physical risk from major climate-related perils (storms, floods, hurricanes, and wildfires) that owner-occupied single-family residences face with data on local economic characteristics to study the geographic and demographic distribution of such risks in the contiguous United States. Current expected damage from climate-related perils is approximately $19 billion per year. Severe convective storms and inland floods account for almost half of the expected damage. The central and southern parts of the U.S. are most exposed to ...
Working Paper
Do You Even Crypto, Bro? Cryptocurrencies in Household Finance
Using repeated large-scale surveys of US households, we study the cryptocurrency investment decisions and motives of households relative to other financial assets. Cryptocurrency holders tend to be young, male, and more libertarian relative to non-crypto holders. Crypto holders expect much higher rates of return for crypto and perceive it as relatively safer than non-holders do. For those holding cryptocurrencies, changes in Bitcoin prices translate into their purchases of durable goods. Finally, information about historical returns of cryptocurrencies in an information provision experiment ...
Discussion Paper
Who’s Paying Those Overdraft Fees?
One criticism of overdraft credit is that the fees seem borne disproportionately by low-income, Black, and Hispanic households. To investigate this concern, we surveyed around 1,000 households about their overdraft activity. Like critics, we find that these groups do tend to overdraft more often. However, when we control for respondents’ credit scores along with their socioeconomic characteristics, we discover that only their credit score predicts overdraft activity. While it’s not altogether surprising that credit constrained households overdrew more often, it’s noteworthy that ...
Discussion Paper
Income Growth Outpaces Household Borrowing
U.S. household debt balances grew by $147 billion (0.8 percent) over the third quarter, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Balances on all loan products recorded moderate increases, led by mortgages (up $75 billion), credit cards (up $24 billion), and auto loans (up $18 billion). Meanwhile, delinquency rates have also risen over the past two years, returning to roughly pre-pandemic levels (and exceeding them in the case of credit cards and auto loans), though there are some signs of stabilization ...
Working Paper
Dynastic Home Equity
Using a nationally-representative panel of consumer credit records for the US from 1999 to 2021, we document a positive correlation between child and parent homeownership. We propose a new causal mechanism behind this relationship: parents extract home equity to help finance their child’s home purchase. To identify the mechanism, we use fixed effect, event study, local projection and matching methods. We find that children whose parents extract equity: (i) are 60-80% more likely to become homeowners; (ii) have lower leverage at origination; and (iii) buy higher-valued homes and at a younger ...