Fed chief on housing: good news and bad

James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, commented on a paper written by a list of financial bigwigs* called “Housing, Monetary Policy, and the Recovery.”

He made two particular points of note. First, the housing bubble and its bursting is scaring a generation of Americans from buying property, and “may suggest a more permanent shift to renting.”

Second, that Americans’ high debt loads are hobbling a recovery. Not only do about 65% of homeowners carry debt, but their combined homes are only worth about $712 billion — and their debt is close to $10 trillion.

In 2005, the typical loan-to-value ratio was about 58%. Today, thanks to collapsing prices and over-borrowed homeowners, it’s at 90%.

Read more from HousingWire.


*Mike Feroli (JPMorgan Chase), Ethan Harris (Bank of America), Amir Sufi (University of Chicago Booth School of Business), and Ken West (University of Wisconsin)

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
This entry was posted in The Buzz. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *