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Journal Article
The Housing Market and Its Influences
The housing market influences our economic and social well-being. It serves as a prime mover of overall economic activity, the foundation for wealth creation, and the basis for the landscape of our neighborhoods as well as the dynamic relationship between cities (particularly older ones) and suburbs. The recent downturn in the housing market generated changes in its aforementioned influences. It also fostered changes in the regulatory environment in the mortgage market. These topics were discussed at the 2014 Reinventing Older Communities conference.
Journal Article
Interview: Steven Davis
As a student at Central Catholic High School in Portland, Ore., in the mid-1970s, Steven Davis took an elective course on economics that piqued his interest. When he went on to college at Portland State University, he initially picked economics as his major but figured he might switch to sociology or international relations. In the end, however, economics won out. "Those fields struck me as interesting," he says, "but economics seemed to offer a more useful set of tools for understanding social and economic issues."
Newsletter
Interest-Only Mortgages and Speculation in Hot Housing Markets
Even as housing markets have temporarily shut down across the U.S. during the Covid-19 pandemic, housing remains a key sector that contributes disproportionately to fluctuations in overall economic activity and that will likely play an important role as the economy reopens. Interest in this market among research economists and policymakers intensified after the exceptional boom and bust in housing between 2003 and 2008. In this Chicago Fed Letter, we describe research in Barlevy and Fisher (2020)1 that examined patterns in the kinds of mortgages homebuyers took out in different cities during ...
Working Paper
Does Zoning Help or Hinder Transit-Oriented (Re)Development?
Despite its reputation as a car-oriented city, the Los Angeles metropolitan area has made substantial investments in developing rail transit since 1990. In cities with older "legacy" rail systems, the built environment has developed over time around fixed transit infrastructure, creating land use patterns oriented towards long-standing rail stations. By contrast, rail stations in Los Angeles were added to an already dense built environment, with auto oriented zoning and established land use patterns. In this paper we ask whether redevelopment is occurring around Los Angeles? rail stations, ...
Working Paper
Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program
To help communities recover from the foreclosure crisis, Congress enacted a set of policies known as the Neighborhood Stabilization Program (NSP). NSP's objective was to mitigate the impact of foreclosures on neighboring properties, through reducing the stock of distressed properties and removing sources of visual blight. This paper presents evidence on production outcomes achieved through the second round of NSP funding (NSP2), and discusses the housing market context under which the program operated from 2010 to 2013. Two key findings emerge. First, local grantees undertook quite different ...
Journal Article
First-Time Homeownership Became Less Affordable Across Most of the United States in Recent Years
New homeownership became less affordable across much of the United States over the last five years. Swiftly rising house prices and higher borrowing costs have not been fully offset by wage gains, making homeownership less affordable in both metropolitan and rural areas. Although new homeownership is less affordable than in years past, slower housing price gains and steadily rising wages may offer some reprieve for housing affordability in the coming year.
Working Paper
The Price of Housing in the United States, 1890–2006
We construct the first consistent market rent and home sales price series for American cities across the 20th century using millions of newspaper real estate listings. Our findings revise several stylized facts about U.S. housing markets. Real market rents did not fall during the 20th century for most cities. Instead, real rental price levels increased by about 20 percent from 1890 to 2006. There was also greater growth in real housing sales prices from 1965 to 1995 than is commonly understood. Using these series, we document several new facts about housing markets. The return to ...
Working Paper
Monetary Policy, Hot Housing Markets and Leverage
Expansionary monetary policy can increase household leverage by stimulating housing liquidity. Low mortgage rates encourage buyers to enter the housing market, raising the speed at which properties can be sold. Because lenders can resell seized foreclosure inventory at lower cost in such a hot housing market, ex-ante they are comfortable financing a larger fraction of the house purchase. Consistent with this mechanism, this study documents empirically that both the housing sales rate and loan-to-value ratios increase after expansionary monetary policy. Calibrating a New Keynesian ...
Journal Article
Understanding the Eighth District’s Housing Market
Interest rate increases have cooled housing markets in the Eighth District, but trends in housing demand have led to tight residential real estate markets.
Working Paper
Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program
During the 2007-2009 housing crisis, concentrations of foreclosed and vacant properties created severe blight in many cities and neighborhoods. The federal Neighborhood Stabilization Program (NSP) was established to help mitigate distress in hard-hit areas by funding the rehabilitation or demolition of troubled properties. This paper analyzes housing market changes in areas that received investments during the second round of NSP funding, focusing on seven large urban counties. Grantees used NSP to invest in census tracts with high rates of distressed and vacancy properties, and tracts that ...