Search Results
Working Paper
Equilibrium mortgage choice and housing tenure decisions with refinancing
The last decade has brought about substantial mortgage innovation and increased refinancing. The objective of this paper is to understand the determinants and implications of mortgage choice in the context of a general equilibrium model with incomplete markets. The equilibrium characterization allows us to study the impact of mortgage financing decisions in the productive economy. We show the influence of different contract characteristics such as the down payment requirement, repayment structure, and the amortization schedule for mortgage choice. We find that loan products that allow for low ...
Working Paper
Accounting for changes in the homeownership rate
After three decades of being relatively constant, the homeownership rate increased over the 1994?2005 period to attain record highs. The objective of this paper is to account for the observed boom in ownership by examining the role played by changes in demographic factors and innovations in the mortgage market that lessened down payment requirements. To measure the aggregate and distributional impact of these factors, we construct a quantitative general equilibrium overlapping-generation model with housing. We find that the long-run importance of the introduction of new mortgage products for ...
Working Paper
The tax treatment of homeowners and landlords and the progressivity of income taxation
This paper analyzes the connection between the asymmetric tax treatment of homeowners and landlords and the progressivity of income taxation using a quantitative overlapping generations general equilibrium model with housing and rental markets. Our model emphasizes the determinants of tenure choice (owning versus renting) and the household decision to supply housing services to the rental market. This formulation breaks the link between the rental price and the equilibrium interest rate. Hence, the aggregate supply of rental property responds differently to the direction of rental price ...
Journal Article
Measuring (Most of) the Slack in the Labor Market
Compared with previous recessions, the manufacturing sector does not show much slack. The construction sector, on the other hand, is below potential.
Journal Article
The macroeconomy of the U.S. states: on the road to recovery?
Despite the recent recovery in house prices, most state economies have yet to recover from the Great Recession.
Journal Article
Measuring the contribution of construction to the slow recovery
Recovery of the construction sector seems a necessary ingredient for a strong and sustained recovery of economic activity and a reduction in the unemployment rate.
Journal Article
How can QE3 affect the housing market?
The Fed?s concern for housing is a relatively new phenomenon. Historically, house price bubbles have been localized and affected only areas with rapid growth. The latest housing bust, however, was a nationwide problem with important ramifications for employment and economic activity.
Journal Article
Mind the regional output gap
This national outlook masks significant variation among states in their paths to recovery.
Journal Article
Lending standards in mortgage markets
While the data seem to suggest that lenders did the right thing by tightening standards and increasing denials...the ongoing financial crisis suggests that they did not tighten them enough.
Journal Article
Examining the housing crisis by home price tier
When broken down by price level - high-priced, mid-priced, and lower-priced homes - the housing boom and subsequent implosion affected each tier differently.