The Mortgage Market Meltdown and House Prices
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R. Glenn Hubbard
Abstract
This paper argues that the U.S. mortgage debacle must be analyzed in the broader setting of global real estate markets. Recent U.S. home price growth closely tracked increases in other developed economies. The analysis distinguishes among market regions in terms of supply elasticity and localized transactions-costs. A series of user-cost models are presented which imply that interest rate fluctuations must figure prominently in any explanation of movements in price/rent ratios. National factors such as the expansion of subprime credit must also be accounted for. The paper concludes with policy prescriptions addressing rapid price declines and elevated interest-rate spreads. We argue that the federal government should play a leading role in helping to reduce interest rates on new mortgages and cushion against underwriting losses on the existing balance sheets of lenders.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Artikel in diesem Heft
- Symposium
- The Mortgage Meltdown, the Economy, and Public Policy
- The Future of Mortgage Finance in the United States
- The Mortgage Meltdown, Financial Markets, and the Economy
- Policies to Deal with the Implosion in the Mortgage Market
- Homes and Cars: Why are the Cycles in Homes and Consumer Durables so Similar?
- Comments on `Policies to Deal with the Implosion' and `Homes and Cars'
- Comments on `Policies to Deal with the Implosion' and `Homes and Cars'
- The Mortgage Market Meltdown and House Prices
- Comments on "The Mortgage Market Meltdown and House Prices"
- Comments on "The Mortgage Market Meltdown and House Prices"
- Comments on "The Mortgage Market Meltdown and House Prices"
- Subprime Mortgages, Foreclosures, and Urban Neighborhoods
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Three Initiatives Enhancing the Mortgage Market and Promoting Financial Stability
- Monoline Regulations to Control the Systemic Risk Created by Investment Banks and GSEs
- Comments on `Three Initiatives Enhancing the Mortgage Market' and `Monoline Regulations to Control Systemic Risk'
- Comments on `Three Initiatives Enhancing the Mortgage Market' and `Monoline Regulations to Control Systemic Risk'
Artikel in diesem Heft
- Symposium
- The Mortgage Meltdown, the Economy, and Public Policy
- The Future of Mortgage Finance in the United States
- The Mortgage Meltdown, Financial Markets, and the Economy
- Policies to Deal with the Implosion in the Mortgage Market
- Homes and Cars: Why are the Cycles in Homes and Consumer Durables so Similar?
- Comments on `Policies to Deal with the Implosion' and `Homes and Cars'
- Comments on `Policies to Deal with the Implosion' and `Homes and Cars'
- The Mortgage Market Meltdown and House Prices
- Comments on "The Mortgage Market Meltdown and House Prices"
- Comments on "The Mortgage Market Meltdown and House Prices"
- Comments on "The Mortgage Market Meltdown and House Prices"
- Subprime Mortgages, Foreclosures, and Urban Neighborhoods
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Comments on "Subprime Mortgages, Foreclosures, and Urban Neighborhoods"
- Three Initiatives Enhancing the Mortgage Market and Promoting Financial Stability
- Monoline Regulations to Control the Systemic Risk Created by Investment Banks and GSEs
- Comments on `Three Initiatives Enhancing the Mortgage Market' and `Monoline Regulations to Control Systemic Risk'
- Comments on `Three Initiatives Enhancing the Mortgage Market' and `Monoline Regulations to Control Systemic Risk'
