Debt Analysis

Housing Market Rebound Fundamentally Different

Our initial blog post on Friday made the argument that the housing market rebound was driven primarily by investors buying up foreclosed properties. As a result, we should not expect it to fuel household spending as we saw before. Two articles out today make arguments that are closely related: home building is shifting toward rental apartments and …

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The Federal Reserve and Wealth Inequality

The Federal Reserve has a well-defined dual-mandate: stabilize prices and maximize employment. However, in trying to achieve these objectives, the Fed can inadvertently favor some segments of the population more than others. This was indeed the case from the perspective of households’ net worth position during the Great Recession. We have already highlighted the highly unequal distribution …

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Is Rising Housing Wealth Great News for Spending?

The Federal Reserve reported yesterday a continued rise in home values, offering a boost to household wealth. From 2006 to 2011, housing wealth fell from $23 trillion to $16 trillion, a loss that devastated the U.S. economy. Our research estimates that almost half of the decline in spending during the Great Recession can be attributed …

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