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Fed’s Mortgage-Backed Securities Purchases Sought Calm, Accommodation During Pandemic
We explore the Federal Reserve’s purchases of agency MBS—mortgage bonds guaranteed by Ginnie Mae, Fannie Mae and Freddie Mac—and related market dynamics during the pandemic, including why mortgage rates fell to historic lows.
Real-Time Market Monitoring Finds Signs of Brewing U.S. Housing Bubble
There is growing cause for concern that U.S. house prices are again becoming unhinged from fundamentals.
Large, Dominant Firms Depress Local Wages; Housing Costs Help Offset Lower Pay
Concern has increased about the ability of very large firms to exert market power and hold down wages in localities where they dominate.
Working Paper
Macroeconomic Effects of China's Financial Policies
The Chinese economy has undergone three major phases: the 1978?97 period marked as the SOE-led economy, the 1998?2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. We analyze the macroeconomic effects of these financial policies throughout the three phases and provide the stylized facts to substantiate our analysis. The stylized facts differ qualitatively across different phases or economies. We argue that the ...
Millennials and Older Gen Zers Made Significant Wealth Gains in 2022
The wealth of U.S. millennials and older Gen Zers grew at an unusually fast pace from 2019 to 2022, with real estate gains driving overall asset growth.
The Long Road to Housing Finance Reform: 'Are We There Yet?'
Over the past decade, broad-based legislative reforms for housing finance have proven elusive. However, reflecting lessons from the financial crisis, a political consensus has emerged on how Fannie Mae and Freddie Mac should operate.
Persistence of house-price growth highlights geographic, credit factors
Growth in house prices is highly persistent and therefore more predictable than that of other assets, such as stocks.
Surging House Prices Expected to Propel Rent Increases, Push Up Inflation
The inflation rates of rent and owners’ equivalent rent (OER)—the amount of rent equivalent to the cost of ownership—have declined sharply since the COVID-19 pandemic began in February 2020. However, we expect rent inflation and OER inflation to accelerate in the years to come.
Rent inflation remains on track to slow over the coming year
Measures of market rents—the rental rate for new leases—increased about 15 percent in 2021. The surge occurred despite a modest increase of less than 4 percent in the rent and owners’ equivalent rent (OER) components of the most commonly watched U.S. inflation gauges, the Consumer Price Index (CPI) and personal consumption expenditures (PCE). A forecast of rent inflation using the Single Family Rent Index from CoreLogic, a financial analytics firm, would have accurately predicted this path a year in advance and currently anticipates rent inflation slowing to below 6 percent by the end ...
U.S. 30-Year mortgage predominance doesn’t seem to delay impact of Fed rate hikes
After comparing economic data of the U.S. and other major advanced economies, we find tentative evidence that the slow adjustment of the outstanding mortgage rate in the U.S. has not played an important role in delaying the intended effects of the monetary tightening.