EconPapers    
Economics at your fingertips  
 

Leaving Households Behind: Institutional Investors and the U.S. Housing Recovery

Lauren Lambie-Hanson, Wenli Li and Michael Slonkosky

No 19-1, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Ten years after the mortgage crisis, the U.S. housing market has rebounded significantly with house prices now near the peak achieved during the boom. Homeownership rates, on the other hand, have continued to decline. We reconcile the two phenomena by documenting the rising presence of institutional investors in this market. Our analysis makes use of housing transaction data. By exploiting heterogeneity in zip codes' exposure to the First Look program instituted by Fannie Mae and Freddie Mac that affected investors' access to foreclosed properties, we establish the causal relationship between the increasing presence of institutions in the housing market and the subsequent recovery in house prices and decline in homeownership rates between 2007 and 2014. We further demonstrate that institutional investors contributed to the improvement in the local labor market by reducing overall unemployment rate and by increasing total employment, construction employment in particular. Local housing rents also rose.

Keywords: housing; homeownership; mortgage crises (search for similar items in EconPapers)
Pages: 33 pages
Date: 2019-01-07
New Economics Papers: this item is included in nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.philadelphiafed.org/-/media/frbp/asset ... ers/2019/wp19-01.pdf (application/pdf)

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:fedpwp:19-1

Ordering information: This working paper can be ordered from

DOI: 10.21799/frbp.wp.2019.01

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Philadelphia Contact information at EDIRC.
Bibliographic data for series maintained by Beth Paul ().

 
Page updated 2025-03-24
Handle: RePEc:fip:fedpwp:19-1