The Federal Reserve Bank of New York has concluded its blog post series on first-time home ownership with an impressive post on whether it makes sense to subsidize first-time buyers if they cannot then sustain home ownership. Building on new data on who’s a first-time homeowner and why borrowers in this segment aren’t all that different from repeat homebuyers, the New York Fed staff look now at the critical question of whether the FHA supports first-time homebuyers who aren’t getting credit elsewhere. We learn that it does, but at considerable cost in terms of long-term wealth accumulation to borrowers ill-prepared for home ownership.
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