Saturday, July 26, 2008

Looking Ahead Toward the Housing Crisis.

After decades of relative stability, the rate of U.S. homeownership began to surge in the mid-1990s, rising from 64% in 1994 to a peak of 69% in 2004, near which it has hovered ever since . . . [S]ome of the explanation likely stems from innovations in the mortgage market that resulted in greater access to credit, lower down payment requirements, and easy and low-cost access to the equity in a house, which makes homeownership more attractive.

Doms, Mark and Meryl Motika. 2006. "The Rise of Homeownership." Federal Reserve Bank of San Francisco Economic Letter (3 November).

Thanks to an old Timothy Taylor column in the Journal of Economic Perspectives

3 comments:

Shag from Brookline said...

What might have been the result if years ago US tax policy had provided to residential renters tax deductions comparable to those for homeowners, e.g. mortgage interest and property tax deductions?

Jack said...

On the other hand, what would have happened if the Federal Reserve Banks produced more veridical research papers. That paper is an excellent warning regarding how such Fed Reserve research should be regarded in the future.

Michael Perelman said...

Shag, homeowners, as a whole, are more affluent than renters. To give renters tax credits comparable to homeowners would violate the fundamental spirit of tax code.

Jack, you are correct. I posted this just because it was so out of touch with what was going on at the time.