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The homeownership gap

Author Info

Listed author(s):
  • Andrew F. Haughwout
  • Richard Peach
  • Joseph Tracy

Abstract

Recent years have seen a sharp rise in the number of negative equity homeowners--those who owe more on their mortgages than their houses are worth. These homeowners are included in the official homeownership rate computed by the Census Bureau, but the savings they must amass to retain their home or purchase a new home are daunting. Recognizing that these homeowners are likely to convert to renters over time, the authors of this analysis calculate an "effective" rate of homeownership that excludes negative equity households. They argue that the effective rate--5.6 percentage points below the official rate--may be a useful guide to the future path of the official rate.

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Article provided by Federal Reserve Bank of New York in its journal Current Issues in Economics and Finance.

Volume (Year): 16 (2010)
Issue (Month): May ()
Pages:

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Handle: RePEc:fip:fednci:y:2010:i:may:n:v.16no.5
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Keywords: Home ownership ; Census ; Economic indicators ; Statistics ; Mortgages;

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  1. Engelhardt, Gary V. & Eriksen, Michael D. & Gale, William G. & Mills, Gregory B., 2010. "What are the social benefits of homeownership? Experimental evidence for low-income households," Journal of Urban Economics, Elsevier, vol. 67(3), pages 249-258, May.
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Cited by:

  1. Schulhofer-Wohl, Sam, 2012. "Negative equity does not reduce homeowners’ mobility," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Feb, pages 1-17.
  2. Chan, Sewin & Haughwout, Andrew & Tracy, Joseph, 2015. "How Mortgage Finance Affects the Urban Landscape," Handbook of Regional and Urban Economics, Elsevier.
  3. Lynn Fisher & Lauren Lambie-Hanson & Paul S. Willen, 2010. "A profile of the mortgage crisis in a low-and-moderate-income community," Public Policy Discussion Paper 10-6, Federal Reserve Bank of Boston.
  4. Michael Brocker & Christopher Hanes, 2014. "The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross-Sections," NBER Chapters,in: Housing and Mortgage Markets in Historical Perspective, pages 161-201 National Bureau of Economic Research, Inc.
  5. Lambie-Hanson, Lauren, 2015. "When does delinquency result in neglect? Mortgage distress and property maintenance," Journal of Urban Economics, Elsevier, vol. 90(C), pages 1-16.
  6. Lauren Lambie-Hanson, 2013. "When does delinquency result in neglect?: mortgage delinquency and property maintenance," Public Policy Discussion Paper 13-1, Federal Reserve Bank of Boston.
  7. Andrew F. Haughwout & Sarah Sutherland & Joseph Tracy, 2013. "Negative equity and housing investment," Staff Reports 636, Federal Reserve Bank of New York.
  8. Konstantin A. Kholodilin & Andreas Mense, 2011. "Can Internet Ads Serve as an Indicator of Homeownership Rates?," Discussion Papers of DIW Berlin 1168, DIW Berlin, German Institute for Economic Research.

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