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Discussion Paper
Did Changes in Economic Expectations Foreshadow Swings in the 2018 Elections?
In the months leading up to the 2018 midterm elections, were economic expectations in congressional districts about to elect a Republican similar to those in districts about to elect a Democrat? How did economic expectations evolve in districts where the party holding the House seat would switch? After examining the persistence of polarization in expectations using voting patterns from the presidential election in our previous post, we explore here how divergence in expectations may have foreshadowed the results of the midterm elections. Using the Survey of Consumer Expectations, we show ...
Report
Nonconforming Preferences: Jumbo Mortgage Lending and Large Bank Stress Tests
The 2010s saw a profound shift towards jumbo mortgage lending by large banks that are regulated under the Dodd-Frank Act. Using data from the Home Mortgage Disclosure Act, we show that the “jumbo shift” is correlated with being subject to the Comprehensive Capital Analysis and Review (CCAR) stress tests, and that financial regulation caused CCAR-regulated banks to change preference for nonconforming relative to conforming loans of similar size. We discuss potential mechanisms through which regulation could have affected bank incentives.
Discussion Paper
Just Released: Is Housing a Good Investment? Where You Stand Depends on Where You Sit
Home price growth expectations remained stable relative to last year, according to the Federal Reserve Bank of New York’s 2018 SCE Housing Survey. Respondents expect mortgage rates to rise over the next year, and perhaps as a result, the share of owners who expect to refinance their mortgages over the next year declined slightly. In addition, homeowners view themselves as more likely to make investments in their homes, and renters’ perceived access to mortgage credit has tightened somewhat. Although the majority of households continue to view housing as a good financial investment, there ...
Discussion Paper
Economic Expectations Grow Less Polarized since the 2016 Election
In two previous blog posts (from January 2017 and December 2017), we examined political polarization in economic expectations in the period immediately after the 2016 presidential election using the Survey of Consumer Expectations (SCE). Today, we begin a two-part series that revisits the issue. In this post, we provide an update on how economic expectations have evolved in counties where a plurality voted for Donald Trump in 2016 and counties where a plurality voted for Hillary Clinton. In a second post, we will look at how economic expectations differed in the run-up to the 2018 ...