If Prices Fall, Mortgage Foreclosures Will Rise

Andrew Haughwout and Belicia Rodriguez

No 20210908b, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In our previous post, we illustrated the recent extraordinarily strong growth in home prices and explored some of its key spatial patterns. Such price increases remind many of the first decade of the 2000s when home prices reversed, contributing to a broad housing market collapse that led to a wave of foreclosures, a financial crisis, and a prolonged recession. This post explores the risk that such an event could recur if home prices go into reverse now. We find that although the situation looks superficially similar to the brink of the last crisis, there are important differences that are likely to mitigate the risks emanating from the housing sector.

Keywords: mortgages; foreclosures; prices (search for similar items in EconPapers)
JEL-codes: D14 R31 (search for similar items in EconPapers)
Date: 2021-09-08
New Economics Papers: this item is included in nep-cwa, nep-isf and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2021 ... eclosures-will-rise/ Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:93032

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().