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Working Paper
An analysis of the neighborhood impacts of a mortgage assistance program: a spatial hedonic model
Down-payment or closing-cost assistance is an effective program in addressing the wealth constraints of low- and moderate-income homebuyers. However, the spillover effect of such programs on the neighborhood is unknown. This paper estimates the impact of the City of Dallas Mortgage Assistance Program (MAP) on nearby home values using a hedonic model of home sales from 1990 to 2006. We define neighborhoods of 1,000 feet around each sale and estimate the average differences in sales prices between neighborhoods with various numbers of MAP properties before and after their appearance. We find ...
Report
Housing busts and household mobility
Using two decades of American Housing Survey data from 1985 to 2005, we estimate the influence of negative home equity and rising mortgage interest rates on household mobility. We find that both factors lead to lower, not higher, mobility rates over time. The effects are economically large -- mobility is almost 50 percent lower for owners with negative equity in their homes. This finding does not imply that current concerns over defaults and homeowners having to relocate are entirely misplaced. It does indicate that, in the past, the mortgage lock-in effects of these two factors were dominant ...
Journal Article
The Great Recession and confidence in homeownership
Confidence in homeownership shifts for those who personally experienced real estate loss during the Great Recession. Older Americans are confident in the value of homeownership. Younger Americans are less confident.
Journal Article
Homeowner subsidies
Though some programs that were created to promote homeownership in the United States, like Fannie Mae and Freddie Mac, have been harshly criticized in the wake of the housing crisis, we are likely to continue to provide some form of taxpayer-funded assistance to those who would become homeowners. Historically, assistance has taken the form of either interest rate or down-payment subsidies, but recent research suggests that down-payment subsidies are much more effective. They create successful homeowners?homeowners who keep their homes?at a lower cost.
Journal Article
Residential Mortgage Lending for Underserved Communities: Recent Innovations
As the United States continues to recover from its worst financial crisis since the 1930s, housing finance leaders from both the public and private sectors have diligently worked to develop programs, products, and services to safely expand access to affordable homeownership. Despite persistently low interest rates, relatively modest growth in home prices, and a strengthening labor market, purchase mortgage volume remains low compared to the pre-crisis and pre-bubble years, and the homeownership rate continues to fall. Factors contributing to the homeownership decline include the still ...
Discussion Paper
The social impact of home rehabilitation in low-income neighborhoods
While economists and others have studied the impact of abandoned foreclosed homes on nearby home prices and crime, very few scholars have attempted to understand the impact of abandonment and rehabilitation on neighborhood social conditions. The foreclosure crisis of 2005-2010 led to a concentration of abandoned foreclosed homes in disadvantaged neighborhoods and these neighborhoods became the targets of a policy intervention, the Neighborhood Stabilization Program. This study employs a mixed-method longitudinal approach to investigate the impact of this foreclosed home rehabilitation policy ...
Discussion Paper
Home ownership education and counseling: issues in research and definition
Many public- and private-sector initiatives support the expansion of home-ownership opportunities for low- and moderate-income households. This discussion paper assesses existing research on the effectiveness of home-ownership education and counseling and opportunities for future research. A limited number of printed copies are available.
Conference Paper
Negative effects of personal bankruptcy filing for homeowners: reduced credit access and lost option value
Focusing on home owners, the paper discusses the reduction in a household?s credit access due to bankruptcy filing and its two effects that may deter a household from filing for bankruptcy. Empirical evidence presented in the paper suggests that a household with a bankruptcy record is about 30% more likely to lose home ownership and consequently the mortgage loans captured in the house, compared to than a similar household without such a record. Since the household is forced to consume at a credit level below their desired level, this translates into an important deterrence effect for ...
Journal Article
Enabling good housing decisions
To counteract clients? bad mortgage choices, community groups must first understand the emotional component of housing decisions. The author explains how choice architecture can help prospective homebuyers avoid mistakes.
Discussion Paper
Shifting confidence in homeownership: the Great Recession
The authors study the responses to several questions related to real estate that were added to the Michigan Survey of Consumers in July and August 2011. In particular, they asked about attitudes toward renting versus buying a home, about commuting, and about how much to spend on a mortgage. By matching the results to data (at the ZIP-code level) about relative house price declines during the recent crisis, they can study the relationship between the U.S. housing crash and the attitudes of individual consumers. They find that younger respondents are relatively less confident about ...