Reverse Mortgages and the Liquidity of Housing Wealth

Housing wealth constitutes most of the non-pension wealth of the elderly population. This study analyzes the potential of reverse mortgages to increase the income and liquid wealth of the elderly by identifying households with relatively high levels of housing equity. Because this article looks at the whole distribution of elderly households and considers debt as well as income, it finds a larger potential market for reverse mortgages than previous studies.
Calculations from the 1990 Survey of Income and Program Participation and Census population estimates show that over six million homeowners in the United States could increase their effective monthly income by at least 20% by using a reverse mortgage. Of these, more than 1.3 million have no children. Furthermore, a reverse mortgage would allow over 1.4 million poor elderly persons to raise their incomes above the poverty line.     

Housing Finance in the 1980's

Strains evident in the housing finance system on the eve of the 80's suggest significant difficulties in meeting the housing demands of the decade ahead. The annual increase in residential mortgages outstanding had climbed to historic levels, relative to GNP, without raising residential construction spending above its ordinary share of GNP. This very weak housing bang for the mortgage buck is traceable, ultimately, to the soaring volume of sales in the used home market, relative to those in the new home market. With significant inflation rates continuing through the 1980's, mortgage lenders will be under great pressure from demands to refinance the existing housing stock, even if the rate of ownership turnover does not persist at the levels of the late 70's. And, as the dollar demands mount, for new and used housing purchases, lenders may find repayment flows from earlier loans continuing to provide a historically small fraction of the funds they need in supplying these demands.     

The Commission's Recommendations on Housing Finance

The Commission proposes radical changes in the structure of institutions supplying residential mortgage funds. By massive broadening of their asset and liability powers, the thrifts are to become quasi-banks. The resulting housing credit gap is to be filled by multipurpose lenders, notably pension funds, and by greater use of mortgage securities backed by conventional as well as FHA and VA loans. For these changes, the Commission relies on the magic of deregulation, initiated partly in the Depository Institutions Act of 1982. A mortgage investment tax credit is proposed to cushion adverse effects on housing, but its adoption is highly unlikely. The Commission's expectations of structural reform through deregulation are overdrawn. Hence, its approach would probably reduce resource allocation to housing. The assertion that the new system would be more efficient is not supported by the meager analysis offered in the Report . Likewise, the claim of greater cyclical stability of mortgage lending remains unsubstantiated. The Commission also recommends curtailment of federal programs supporting the private housing sector: restricting FHA to high-risk loans and phasing down the GNMA guaranty of mortgage securities. But the proposals for FNMA and FHLMC stop short of cutting their umbilical cords of government.     

Price Expectations,Distressed Mortgage Markets and the Housing Wealth Effect

Using a unique combination of regulatory and survey microdata, we examine the importance of the life cycle theory of consumption in estimating housing wealth effects for the Irish mortgage market. Since the recent financial crisis, this market has experienced substantial house price declines and negative equity. Thus, house price expectations are likely to be important in influencing housing wealth effects. We find a positive correlation between consumption and changes in housing wealth among our sample of mortgaged Irish households. Furthermore, we find that this positive association only exists when housing wealth changes are perceived to be of a permanent nature.     

Indicators of Local Housing Affordability: Comparative and Spatial Approaches

This paper focuses on the measurement of local housing affordability problems. A number of different housing market indicators are offered that help identify the magnitude and nature of housing affordability problems and their geographic distribution. This interest is prompted by the predominance of housing affordability problems and the severity of the problems for many of the lowest income renter households. In addition, there is significant policy interest in "the national goal that every American family be able to afford a decent home in a suitable environment" (National Affordable Housing Act of 1990). This paper develops measures of the spatial distribution of affordability problems and implements measures of the mismatch between the demand and supply of housing affordable to the lowest income households.     

The Impact of Homeowners' Housing Wealth Misestimation on Consumption and Saving Decisions

Using a unique data set of 81,943 house value estimates by the homeowners and their financial institution, I find that homeowners overestimate their house value by 3.1%. After controlling for homeowners' socioeconomic characteristics, I find that ex ante homeowners who rate (cash-out) refinance an existing loan to increase savings (consumption) are significantly more likely to underestimate (overestimate) their house value. Moreover, overestimators (underestimators) are more likely to increase (reduce) their spending ex post . Finally, I also find that underestimators are more likely to prepay their loans and overestimators are more likely to default on their loans.     

Housing,Wealth, Income and Consumption: China and Homeownership Heterogeneity

Impacts on consumer spending in urban China associated with housing value, housing equity, financial assets and household income are evaluated using longitudinal data from the China Family Panel Studies (CFPS) survey. Findings suggest that the housing wealth effect on household consumption in China is much larger than has been shown for developed economies. The larger impact is prospectively related to structural limits on investing which favor real estate ownership, along with the dominant position of housing in total household wealth. We also find that a household's consumption varies across housing tenure. Homeowners having joint ownership of property on average have the highest consumption propensity, while those having sole ownership of property consume the most in response to appreciation in housing wealth.     

Housing Finance in a Stochastic Economy: Contract Pricing and Choice

An empirical analysis of macroeconomic time series from the mortgage, housing, capital and labor markets is based on life-cycle consumption and mortgage option pricing considerations. Vector autoregression techniques characterize the long-run equilibrium and short-run dynamics of the mortgage market as it relates to the other sectoral markets. A simultaneous-equations model characterizes the partial equilibrium in the differentiated products market for fixed- and adjustablerate mortgage contracts. The empirical results reveal the impacts that market conditions have on mortgage volumes and prices, and they generally support the implications of the consumption and pricing theories.     

Introduction: Deregulation and Reform of Housing and Housing Finance Markets: Recent Lessons from Western and Central Europe

Recent years have seen the emergence of substantial scholarly research devoted to cross-national comparisons of real estate markets and financial institutions. In part, these analyses evaluate real estate market efficiency and the distributional outcomes associated with diverse institutions and economies. Further, these analyses draw from the experience of different markets and institutions in a normative sense, so as to help facilitate the development of appropriate real estate market mechanisms and policy in emerging market economies.     

Housing and Urban Development Indicators: A Good Idea Whose Time Has Returned

This special issue of Real Estate Economics is devoted to "Housing and Urban Development Indicators." The issue has been underwritten by the United States Department of Housing and Urban Development as a U.S. Contribution to the United Nation's Habitat II Conference, held in Istanbul, Turkey in June 1996. This introduction first briefly explains the role of indicators in urban research. Current research on indicators is then described, including a major international research effort undertaken in over fifty countries with support from numerous academics and other researchers, the United Nations, the World Bank and a number of governments. Finally, the papers in this issue are introduced and placed in context.     

The Intergenerational Transmission of Automobile Brand Preferences

We document a strong correlation in the brand of automobile chosen by parents and their adult children, using data from the Panel Study of Income Dynamics. This correlation could represent transmission of brand preferences across generations, or it could result from correlation in family characteristics that determine brand choice. We present a variety of empirical specifications that lend support to the former interpretation and to a mechanism that relies at least in part on state dependence. We then discuss implications of intergenerational brand preference transmission for automakers’ product‐line strategies and for the strategic pricing of vehicles to different age groups.     

Effects of Housing Codes on Local Housing Markets

Housing codes are typically instituted in order to raise the average level of housing quality in a community. However, in doing so, the institution of a housing code likely has effects on other housing characteristics. Using data from municipalities in North Carolina, this study finds that municipalities with housing codes have higher average occupancy densities among all households and lower homeownership rates among low-income households, but housing codes have no statistically discernible effect on housing values and expenditures. The results suggest that housing codes are not costless; most importantly, codes force consumers to trade housing quantity for quality.     

The Effect of Subsidized Housing on Values of Adjacent Housing

This is a case study of the effect of subsidized housing on the value of adjacent non-subsidized housing. Four townhouse clusters in Fairfax County, Virginia, were selected for study because of the high degree of homogeneity between clusters. The clusters are all in the same community but vary in distance from subsidized housing. Sale prices were analyzed using a regression model which included distance from subsidized housing as an independent variable. Based on the results of the regression analysis, the authors conclude that the subsidized housing had a negative impact on the values of adjacent properties.     

论住房制度改革及住房保障的发展

通过系统的回顾我国住房制度改革的发展历史,以及对住房市场和住房保障两条发展路线的梳理,结合福利经济学的观点,提出住房保障是住房市场的必要补充,是对社会财富合理再分配的观点.提出了住房保障应当与住房市场相互协调,住房保障的规模要与经济发展水平、社会发展阶段相适应的相互发展关系.     

Expected and Actual Effects of Housing Allowances on Housing Prices

Most analysts and policy makers expected fullscale housing allowance programs to substantially disturb local housing markets, causing housing prices tb increase sharply. This paper reviews conjectures about expected price effects, summarizes evidence from the Housing Assistance Supply Experiment, and explains why the program did not engender the expected price inflation.     

三大财富及其关系研究

财富可以分为劳动财富、自然财富和人文财富三种。其中,劳动财富是人类劳动创造的;自然财富是大自然赋予人类的;人文财富是在人类生活中自然产生的,或者历史遗留下来的。三大财富之间不是孤立的,而是存在既统一又对立的关系。中国应当从过去仅仅关注劳动财富的单一求解向同时关注劳动财富、自然财富和人文财富三大财富的综合求解转变,而为实现这一转变,必须对我们的生产方式、生活方式、发展方式进行重新选择定位。同时,在区域协调发展上,中国应当改变过去那种忽略地区资源禀赋差异的做法,不是在各个地区采用相同发展模式,而是通过建立发展选择机制、市场交换机制、财富平衡机制,实现三大财富的区域统筹。     

Housing Policy Implementation Effect Analysis in the Macro-control Round of Housing Market

为了解政府对住房市场宏观调控采取政策的执行效果,采用定性分析的方法对住房市场宏观调控中的金融、房贷和土地政策进行分析.在梳理总结各类政策的基础上,分析政策出台规律、政策实施效果以及造成市场现状的根源及深层次原因.结合政策特点和问题根源,提出相应的政策建议改善住房市场调控现状,建立住房市场宏观调控的长效机制.