Abstract:
The U.S. government has actively intervened the housing market, and tried to foster home ownership, which is an important part of ''American Dreams''. In particular, Government-driven Mortgage Guarantee Programs (e.g., FHA,VA, RHS) try to help those households with a disadvantage in the housing and mortgage markets. Using micro-level data from survey of consumer finance data (1989-2013) and based on a quantitative model, we find that these programs essentially provide insurance and redistribution only within low- income and low-asset households, and the unintended GE effects on housing prices may hurt other home buyers.
Photo: Vegard Wiborg