(UM11-Q2) - Diminishing Margins: Housing Market Declines and Family Financial Responses
Frank Stafford and Erik Hurst
This project will investigate two questions. (1.) Do mortgage foreclosure, and inability (or unwillingness) to continue mortgage payments, depend, in a significant fraction of cases, on recessionary unemployment? If so, can they be viewed as arising from short-run problems? Is the answer to this question different for different age groups? (2.) At the present stage of the financial crisis, personal savings rates are rising and households are reducing their debt obligations. Which groups are saving more? How are defined-contribution pension accounts faring (i.e., are they being cashed in to meet more immediate obligations)? Are current responses to the crisis stripping away assets that will be missed by retirees in the future? Is the crisis continuing for some households as others are starting to save more?