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Journal Article
Intergenerational Homeownership and Mortgage Distress
Rates of US homeownership have declined in the past two decades, and the decline has been especially pronounced for young adults. Motivated by recent research that explores the ways in which personal experiences can affect financial attitudes and beliefs, we explore whether the negative homeownership experiences of parents during the 2008 financial crisis could have caused their children to view homeownership less favorably. We find that parental mortgage distress negatively correlates with the probability that a child will purchase a home, and we explore various channels through which this ...
Journal Article
Regulations
The Federal Reserve, HUD and the Federal Trade Commission, among others, implement regulations that address many abusive lending practices.
Journal Article
Despite Price Pressures, Nebraska Households Have Maintained a Savings Buffer
Despite some persistent inflationary pressures, strong income growth has positioned Nebraska households to weather the pressures better than many other places. Nationally, households have faced elevated costs and depleted savings buffers over the past several years. However, Nebraskans have maintained exceptionally high savings rates—nearly double the national average. This savings advantage has had the potential to compound significantly, making major purchases such as housing somewhat more attainable for Nebraska households.
Discussion Paper
Inequality in U.S. Homeownership Rates by Race and Ethnicity
Homeownership has historically been an important means for Americans to accumulate wealth—in fact, at more than $15 trillion, housing equity accounts for 16 percent of total U.S. household wealth. Consequently, the U.S. homeownership cycle has triggered large swings in Americans’ net worth over the past twenty-five years. However, the nature of those swings has varied significantly by race and ethnicity, with different demographic groups tracing distinct trajectories through the housing boom, the foreclosure crisis, and the subsequent recovery. Here, we look into the dynamics underlying ...
Discussion Paper
Do People View Housing as a Good Investment and Why?
Housing represents the largest asset owned by most households and is a major means of wealth accumulation, particularly for the middle class. Yet there is limited understanding of how households view housing as an investment relative to financial assets, in part because of their differences beyond the usual risk and return trade-off. Housing offers households an accessible source of leverage and a commitment device for saving through an amortization schedule. For an owner-occupied residence, it also provides stability and hedges for rising housing costs. On the other hand, housing is much ...
Discussion Paper
The Homeownership Gap Is Finally Closing
The homeownership rate peaked at 69 percent in late 2004. By the summer of 2016, it had dropped below 63 percent—exactly where it was when the government started reporting these data back in 1965. The housing bust played a central role in this decline. We capture this effect through what we call the homeownership gap—the difference between the official homeownership rate and the “effective” rate where only homeowners with positive equity in their house are counted. The effective rate takes into account that a borrower does not in an economic sense own the house if the mortgage debt is ...
Discussion Paper
Who Has Been Evicted and Why?
More than two million American households are at risk of eviction every year. Evictions have been found to cause prolonged homelessness, worsened health conditions, and lack of credit access. During the COVID-19 outbreak, governments at all levels implemented eviction moratoriums to keep renters in their homes. As these moratoriums and enhanced income supports for unemployed workers come to an end, the possibility of a wave of evictions in the second half of the year is drawing increased attention. Despite the importance of evictions and related policies, very few economic studies have been ...
Journal Article
Understanding the Generational Gaps in Homeownership
Student loan debt may contribute to the homeownership gap among generations.
Report
Echoes of rising tuition in students’ borrowing, educational attainment, and homeownership in post-recession America
State average enrollment-weighted public college tuition and fees per school year rose by $3,843 (or 81 percent) between 2001 and 2009. How are recent cohorts absorbing this surge in college costs, and what effect is it having on their post-schooling consumption? Our analysis of tuition, educational attainment, and debt patterns for nine youth cohorts across all fifty states indicates that the tuition hike accounted for $1,628, or about 30 percent, of the increase in average student debt per capita among 24-year-olds between 2003 and 2011. However, estimates indicate no meaningful response to ...
Journal Article
Spotlight on Research: Down Payment Assistance Plays Critical Role in Affordable Homeownership
In the aftermath of the recent Great Recession, there has been a tightening in mortgage lending practices. This cautious atmosphere has been prompted in large part by the rash of foreclosures in the housing market that accompanied the financial crisis. One potential safeguard is the existence of a down payment requirement that must be met by prospective homebuyers as a condition of securing a mortgage. The rationale is that when individuals invest their own money in the form of a down payment, the potential homebuyers will be more motivated to maintain their mortgage obligations. For those ...