Here, we review recent research from the Federal Reserve Bank of New York on the shape of U.S. mortgage finance, noting how policy shaped it as well as how this new market reality will shape the policy debates to come.  What struck us most about the compiled data from the New York Fed is how dramatically the market has changed since the crisis due to all the balance-sheet repair needed by both borrowers and bank lenders.  Sustained economic growth may repair the market itself, but the Fed’s data show how inexorably demographics will reduce demand for an array of mortgage products absent policy measures structured to meet the very different needs of new entrants.  Tax reform will be the first test as to how the changed demographics of home ownership will be addressed.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.