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Speech
Official Monetary and Financial Institutions Forum Fed Week Financial Stability Session
Short-term credit markets have been disrupted in the past two recessions, and significant risks remain. For example, prime money market mutual funds and stablecoins bear attention. Substantial emergency actions were necessary to support lending during the pandemic, and the economy would benefit from being less dependent on ad hoc measures in crises. A properly implemented Countercyclical Capital Buffer, or CCyB, would help avoid some of these issues. Unfortunately, emergency facilities do well supporting large firms but are challenged somewhat to reach small firms. Without better facilities ...
Working Paper
The ins and arounds in the U.S. housing market
In the United States, 15 percent of households change residence in a given year. This result is based on data from the Panel Study of Income Dynamics on gross flows within and between the two segments of the housing market ? renter-occupied properties and owner-occupied properties. The gross flows between these two segments are four times larger than the net flows. From a secular perspective, housing turnover exhibits a hump-shaped pattern between 1970 and 2000, which this paper attributes to changes in the age composition of the U.S. population. At higher frequencies, housing turnover is ...
Working Paper
Is the Light Rail “Tide” Lifting Property Values? Evidence from Hampton Roads, Virginia
In this paper we examine the effect of light rail transit on the residential real estate market in Hampton Roads, Virginia. The Norfolk Tide light rail began operations in August 2011 and has experienced disappointing levels of ridership over its first four years of operations. We estimate the effect of the Tide using a difference-in-differences model and consider several outcome variables for the residential housing market, including sales price, sales-list price spread and the time-on-market. Our identification strategy exploits a proposed rail line in neighboring Virginia Beach, Virginia, ...
Journal Article
The Evolving Homebuying Landscape: An Update with 2023 Data
The years immediately following the pandemic saw large swings in the housing market, from a rapid growth in prices and homebuying activity in the early years to a sharp contraction in the market as price and interest rate increases challenged homebuying affordability. As part of the Federal Reserve Bank of San Francisco’s work to understand the economic experiences of the communities we serve to inform monetary policy and other areas of our work, we released a report in the fall of 2024 examining trends in pandemic homebuying patterns through 2022. That analysis found that many groups of ...
Speech
In Conversation: Mary C. Daly with UC Berkeley’s Fisher Center for Real Estate & Urban Economics
Presentation at UC Berkeley’s Fisher Center for Real Estate & Urban Economics, Berkeley, California, October 21, 2022, by Mary C. Daly, President and Chief Executive Officer, Federal Reserve Bank of San Francisco.
Working Paper
Quality, Inequality and Understanding Housing Markets
Most housing research relies on a single-margin model where a single housing price relates to a single housing quantity. We generalize this approach by introducing income inequality and housing quality. Two important challenges to studying housing supply (and demand) emerge: First, there is no singular housing supply function, instead there is a continuum of unit-supply functions indexed by quality. This implies that supply elasticity estimates are local average treatment effects (LATEs), not structural elasticities. Second, spillovers common in spatial settings may preclude even the LATE ...
Working Paper
The Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets: New Evidence from Administrative Microdata
From early 2021 through early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, with substantial heterogeneity across local economies. Using administrative microdata, we construct new measures of national and local unauthorized immigration flows and exploit exogenous variation using multiple empirical designs. Unauthorized immigrant worker flows increased local employment approximately one-for-one, with mixed evidence of wage depression. They also raised house prices and rents without expanding housing supply. Finally, these flows reduced labor income per capita ...
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
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 ...
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 ...