La fin de l'American Dream

Alain Sand-Zantman

Revue de l'OFCE, 2007, vol. 101, issue 2, 193-225

Abstract: After an exceptionally long period of growth on the housing market, the activity has turned over from the beginning of 2006. It seems deeply engaged in a severe adjustment but we suppose this will not lead the economy in a global recession. After a presentation of the past trends (activity, house prices, wealth, mortgage debt), we try to profile these new homeowners and understand the circumstances which allowed households to become owners. The increase of debt could not have taken place if some specific conditions had not been satisfied (low interest rates, high liquidity because of the expansion of the secondary market, creativity of banks to get back the limits of indebtedness). With the increase of interest rates and the slowdown of prices, mortgage equity withdrawal become less attractive and the weakest households could be trapped in their financial commitment, coming back to the hard reality. JEL codes: D10, O16.

JEL-codes: D10 O16 (search for similar items in EconPapers)
Date: 2007
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