Finance and Economics Discussion Series |
---|
Sources and Uses of Equity Extracted from Homes Alan Greenspan and James Kennedy 2007`-20 |
Screen reader format
Full paper (400K KB PDF) | Data (Excel file 176K KB XLS)
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2006 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1) Value of existing homes sold (implied) | |||||||||||||||||
(2) Value of existing homes sold (implied) - Sellers' debt cancellation | |||||||||||||||||
(3) Value of existing homes sold (implied) - Closing costs on existing homes paid in cash | |||||||||||||||||
(4) Value of existing homes sold (implied) - Home equity loans paid off at the time of sale | |||||||||||||||||
(5) Net proceeds available to sellers of existing homes [(1)-(2)-(3)-(4)] | |||||||||||||||||
(6) Value of existing homes sold by type: Owner-occupied homes [(1-(18))*(1)] | |||||||||||||||||
(7) Value of existing homes sold by type: Owner-occupied homes [(1-(18))*(1)] - Repeat buyers [(19)*(6)] | |||||||||||||||||
(8) Value of existing homes sold by type: Owner-occupied homes [(1-(18))*(1)] - Non-repeat buyers [(6)-(7)] | |||||||||||||||||
(9) Value of existing homes sold by type: Rental and vacant homes [(18)*(1)] | |||||||||||||||||
(10) Sellers' debt cancellation by type: Owner-occupied homes [{(6)/(1)}*(2)] | |||||||||||||||||
(11) Sellers' debt cancellation by type: Owner-occupied homes [{(6)/(1)}*(2)] - Repeat buyers [{(7)/(6)}*(10)] | |||||||||||||||||
(12) Sellers' debt cancellation by type: Owner-occupied homes [{(6)/(1)}*(2)] - Non-repeat buyers [(10)-(11)] | |||||||||||||||||
(13) Sellers' debt cancellation by type: Rental and vacant homes [(2)-(10)] | |||||||||||||||||
(14) Decomposition of the net proceeds available to sellers of existing homes: Owner-occupied homes [(6)-(10)-{(6)/(1)}*{(3)+(4)}] | |||||||||||||||||
(15) Decomposition of the net proceeds available to sellers of existing homes: Owner-occupied homes [(6)-(10)-{(6)/(1)}*{(3)+(4)}] - Repeat buyers[{(7)/(6)}*(14)] | |||||||||||||||||
(16) Decomposition of the net proceeds available to sellers of existing homes: Owner-occupied homes [(6)-(10)-{(6)/(1)}*{(3)+(4)}] - Non-repeat buyers[(14)-(15)] | |||||||||||||||||
(17) Decomposition of the net proceeds available to sellers of existing homes: Rental and Vacant [(5)-(14)] | |||||||||||||||||
(18) Memo: Rental/vacant share of the value of homes purchased | |||||||||||||||||
(19) Memo: Repeat buyers' share of home purchases (AHS & Chicago Title) |
Fixed share: | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2006 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(20) Repeat buyers [(15)] | ||||||||||||||||||
(21) Repeat buyers [(15)] - Cash used to purchase a home [0.87*(20)] | ||||||||||||||||||
(22) Repeat buyers [(15)] - PCE [0.03*(20)] | ||||||||||||||||||
(23) Repeat buyers [(15)] - Financial investments and other [0.1*(20)] | ||||||||||||||||||
(24) Non-repeat buyers [(16)] | ||||||||||||||||||
(25) Non-repeat buyers [(16)] - PCE [0.15*(24)] | ||||||||||||||||||
(26) Non-repeat buyers [(16)] - Financial investments and other [0.85*(24)] | ||||||||||||||||||
(27) Rental and vacant homes [(17)] | ||||||||||||||||||
(28) Rental and vacant homes [(17)] - Cash used to purchase a home [0.87*(27)] | ||||||||||||||||||
(29) Rental and vacant homes [(17)] - PCE [0.03*(27)] | ||||||||||||||||||
(30) Rental and vacant homes [(17)] - Financial investments and other [0.1*(27)] | ||||||||||||||||||
(31) Total [(5)] | ||||||||||||||||||
(32) Total [(5)]: Cash used to purchase a home [(21)+(28)] | ||||||||||||||||||
(33) Total [(5)]: PCE [(22)+(25)+(29)] | ||||||||||||||||||
(34) Total [(5)]: Financial investments and other [(23)+(26)+(30)] |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1) Free cash resulting from equity extraction [(2)+(3)+(4)]: | |||||||||||||||||||
(2) Free cash resulting from equity extraction [(2)+(3)+(4)]: Home sales [(28)] | |||||||||||||||||||
(3) Free cash resulting from equity extraction [(2)+(3)+(4)]: Home equity loans net of unscheduled payments [(47)-(48)-(16)] | |||||||||||||||||||
(4) Free cash resulting from equity extraction [(2)+(3)+(4)]: Cash out refinancings [(85)] | |||||||||||||||||||
(5) Used For: Repayment of non-mortgage debt [(30)+(49)+(86)] | |||||||||||||||||||
(6) Used For: Repayment of non-mortgage debt [(30)+(49)+(86)] - As a share of consumer credit debt outstanding, beg. of year | |||||||||||||||||||
(7) Used For: Home improvements [(50)+(87)] | |||||||||||||||||||
(8) Used For: Home improvements [(50)+(87)] - As a share of outlays for residential improvements (NIPA) | |||||||||||||||||||
(9) Used For: Personal consumption expenditures [(31)+(51)+(88)] | |||||||||||||||||||
(10) Used For: Personal consumption expenditures [(31)+(51)+(88)] - As a share of total PCE | |||||||||||||||||||
(11) Used For: Acquisition of assets and other [(32)+(52)+(89)-(16)] | |||||||||||||||||||
(12) Memo: PCE plus non-mortgage debt repayment [(5)+(9)] | |||||||||||||||||||
(13) Memo: PCE plus non-mortgage debt repayment [(5)+(9)] - As a share of total PCE | |||||||||||||||||||
(14) Memo: HE debt repayment resulting from home sales and refis [(27)+(84)] | |||||||||||||||||||
(15) Memo: HE debt repayment resulting from home sales and refis [(27)+(84)] - As a share of HE debt outstanding, end of previous year | |||||||||||||||||||
(16) Memo: Unscheduled regular mortgage payments | |||||||||||||||||||
(17) Memo: Closing costs on existing home sales, refinancings, and home equity loans [(26)+(48)+(83)] | |||||||||||||||||||
(18) Memo: Gross equity extraction | |||||||||||||||||||
(19) Memo: Turnover extraction + change in home equity loans outstanding net of unscheduled payments + gross cash out [(24)+(46)+(82)-(16)] | |||||||||||||||||||
(20) Memo: Turnover extraction + change in home equity loans outstanding net of unscheduled payments + gross cash out [(24)+(46)+(82)-(16)] - Repayments discrepancy [(19)-(18)] |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(21) Value of existing home sales (implied) | |||||||||||||||||||
(22) Value of existing home sales (implied): Existing home extensions | |||||||||||||||||||
(23) Value of existing home sales (implied): Sellers' debt cancellation | |||||||||||||||||||
(24) Turnover Extraction [(22)-(23)] | |||||||||||||||||||
(25) Turnover Extraction [(22)-(23)] + Cash used to purchase existing homes | |||||||||||||||||||
(26) Turnover Extraction [(22)-(23)] - Total closing costs paid in cash [(41)] | |||||||||||||||||||
(27) Turnover Extraction [(22)-(23)] - Home equity loans paid off at time of sale | |||||||||||||||||||
(28) Turnover Extraction [(22)-(23)] = Net proceeds available to sellers of existing homes | |||||||||||||||||||
(29) Turnover Extraction [(22)-(23)] Used for: Home purchase (repeat buyers & investors; new & existing) | |||||||||||||||||||
(30) Turnover Extraction [(22)-(23)] Used for: Repayment of non-mortgage debt | |||||||||||||||||||
(31) Turnover Extraction [(22)-(23)] Used for: PCE | |||||||||||||||||||
(32) Turnover Extraction [(22)-(23)] Used for: Investments (excluding homes) | |||||||||||||||||||
(33) Memo: PCE plus repayment of non-mortgage debt [(30)+(31)] | |||||||||||||||||||
(34) Memo: PCE plus repayment of non-mortgage debt [(30)+(31)] -> Closing costs paid in cash, ex. commissions [(0.0165)*(21)] | |||||||||||||||||||
(35) Memo: PCE plus repayment of non-mortgage debt [(30)+(31)] -> Commissions on existing sales [(0.055)*(21)] | |||||||||||||||||||
(36) Memo: Total closing costs paid in cash to purch. existing homes [(34)+(35)] | |||||||||||||||||||
(37) Memo: Fixed parameters: Commission rate on existing homes 0.0550 | |||||||||||||||||||
(38) Memo: Fixed parameters: Other closing costs paid in cash / home price 0.0165 | |||||||||||||||||||
(39) Memo: Points, share of loan amount (FHFB, new and existing homes) | |||||||||||||||||||
(40) Memo: Points paid [(39)*(22)] | |||||||||||||||||||
(41) Memo: Total closing costs paid in cash [(36)+(40)] | |||||||||||||||||||
(42) Memo: Value of new home sales (implied) | |||||||||||||||||||
(43) Memo: Closing costs and points on new homes | |||||||||||||||||||
(44) Memo: Total closing costs on home sales [(43)+(41)}] |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(45) Level of home equity loans outstanding (FOF) | |||||||||||||||||||
(46) Level of home equity loans outstanding (FOF) Change | |||||||||||||||||||
(47) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> | |||||||||||||||||||
(48) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> Transactions costs [(57)+(65)] | |||||||||||||||||||
(49) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> Repayment of non-mortgage debt [(58)+(66)] | |||||||||||||||||||
(50) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> Home improvements [(59)+(67)] | |||||||||||||||||||
(51) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> PCE [(60)+(68)] | |||||||||||||||||||
(52) Level of home equity loans outstanding (FOF) + HE debt repayments from other EE [(46)+(14)]<1> Real estate and business expenses [(61)+(69)] | |||||||||||||||||||
(53) Memo: PCE plus repayment of non-mortgage debt [(49)+(51)] | |||||||||||||||||||
(54) Level of closed-end home equity loans (FOF) | |||||||||||||||||||
(55) Level of closed-end home equity loans (FOF) Change | |||||||||||||||||||
(56) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> | |||||||||||||||||||
(57) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> Transactions costs [(78)*(56)] | |||||||||||||||||||
(58) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> Repayment of non-mortgage debt [(70)*{(56)-(57)}] | |||||||||||||||||||
(59) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> Home improvements [(71)*{(56)-(57)}] | |||||||||||||||||||
(60) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> PCE [(72)*{(56)-(57)}] | |||||||||||||||||||
(61) Level of closed-end home equity loans (FOF) + HE repayment from other EE [{(54)/(45)}{t-1}*(14)+(55)]<1> Real estate and business expenses [(73)*{(56)-(57)}] | |||||||||||||||||||
(62) Level of home equity lines of credit (FOF) | |||||||||||||||||||
(63) Level of home equity lines of credit (FOF) Change | |||||||||||||||||||
(64) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> | |||||||||||||||||||
(65) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> Transactions costs [(79)*(64)] | |||||||||||||||||||
(66) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> Repayment of non-mortgage debt [(74)*{(64)-(65)}] | |||||||||||||||||||
(67) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> Home improvements [(75)*{(64)-(65)}] | |||||||||||||||||||
(68) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> PCE [(76)*{(64)-(65)}] | |||||||||||||||||||
(69) Level of home equity lines of credit (FOF) + HE repayment from EE [{(62)/(45)}{t-1}*(10)+(63)]<1> Real estate and business expenses [(77)*{(64)-(65)}] |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(70) Repayment of non-mortgage debt | |||||||||||||||||||
(71) Home improvements | |||||||||||||||||||
(72) PCE | |||||||||||||||||||
(73) Real estate and business expenses |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(74) Repayment of non-mortgage debt | |||||||||||||||||||
(75) Home improvements | |||||||||||||||||||
(76) PCE | |||||||||||||||||||
(77) Real estate and business expenses | |||||||||||||||||||
(78) Memo: costs of obtaining HE loans as a share of loan amount - Closed-end | |||||||||||||||||||
(79) Memo: costs of obtaining HE loans as a share of loan amount - HELOCS |
1. HE repayment from other EE (equity extraction): repayments of home equity loans from the proceeds of home sales or cash our refinancings.
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(80) Refinance originations | |||||||||||||||||||
(81) Repayments resulting from refinancings (first liens) | |||||||||||||||||||
(82) Repayments resulting from refinancings (first liens): Gross cash out [(80)-(81)] | |||||||||||||||||||
(83) Repayments resulting from refinancings (first liens): Closing costs [(94)*(80)] | |||||||||||||||||||
(84) Repayments resulting from refinancings (first liens): Home equity loan repayments [(96)*(80)] | |||||||||||||||||||
(85) Repayments resulting from refinancings (first liens): Free cash generated by refinancings [(82)-(83)-(84)] | |||||||||||||||||||
(86) Used for: Repayment of non-mortgage debt [(0.27)*(85)] | |||||||||||||||||||
(87) Used for: Home improvements [(0.34)*(85)] | |||||||||||||||||||
(88) Used for: PCE [(0.17)*(85)] | |||||||||||||||||||
(89) Used for: Acquisition of assets and other [(90)+(91)] | |||||||||||||||||||
(90) Used for: Acquisition of assets and other [(90)+(91)] - Financial assets [(0.075)*(85)] | |||||||||||||||||||
(91) Used for: Acquisition of assets and other [(90)+(91)] - Real estate or business investments [(0.145)*(85)] | |||||||||||||||||||
(92) Used for: PCE plus repayment of non-mortgage debt [(88)+(86)] | |||||||||||||||||||
(93) Memo: Gross cash out share [(82)/(80)] | |||||||||||||||||||
(93) Memo: GCO share, no-cash out loans (inferred from Freddie Mac data) | |||||||||||||||||||
(94) Memo: Fees and points / refinance orig. [(0.0125)+(95)] | |||||||||||||||||||
(95) Memo: Fees and points / refinance orig. [(0.0125)+(95)] - Points (FHFB) [(39)] | |||||||||||||||||||
(96) Memo: Home equity loans paid of at refi. / refi orig. [(93)-(94)] | |||||||||||||||||||
(97) Memo: Free cash as a share of refinance originations [(85)/(80)] | |||||||||||||||||||
(98) Memo: Ratio: Free cash / gross cash out [(85)/(82)] |
Lines 93 and 93: source Freddie Mac and our estimates
1998:Q1-1999:Q1 | 2001:Q1-2002:Q2 | Average | |
---|---|---|---|
(a): Repayment of nonmortgage debt | |||
(b): Home improvements | |||
(c): PCE | |||
(d): Stock market and other investments | |||
(e): Real estate, business investment, or taxes |
1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | Average 1991-2000 | Average 2001-2005 | Average 1991-2005 |
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(99) Gross equity extraction [(18)] | |||||||||||||||||||
(100) Gross equity extraction [(18)]: Net equity extraction [(1)-(17)] | |||||||||||||||||||
(101) Gross equity extraction [(18)]: Net equity extraction [(1)-(17)] As percent of disposable income | |||||||||||||||||||
(102) Free cash generated by equity extraction [(1)] | |||||||||||||||||||
(103) Free cash generated by equity extraction [(1)]: As percent of disposable income | |||||||||||||||||||
(104) Disposable income (NSA) | |||||||||||||||||||
(105) Disposable income (NSA): NIPA personal saving | |||||||||||||||||||
(106) Disposable income (NSA): NIPA personal saving - NIPA savings rate, percent | |||||||||||||||||||
(107) PCE financed by Equity Extraction: Direct effects [(9)] | |||||||||||||||||||
(108) PCE financed by Equity Extraction: Direct effects [(9)] As a percent of disposable income | |||||||||||||||||||
(109) PCE financed by Equity Extraction: Direct effects plus repayment of non-mortgage debt [(12)] | |||||||||||||||||||
(110) PCE financed by Equity Extraction: Direct effects plus repayment of non-mortgage debt [(12)] As a percent of disposable income | |||||||||||||||||||
(111) NIPA personal saving plus: Direct PCE effect [(105)+(107)] | |||||||||||||||||||
(112) NIPA personal saving plus: Direct PCE effect [(105)+(107)] - Repayment of non-mortgage debt [(105)+(109)] | |||||||||||||||||||
(113) NIPA personal saving rate plus: Direct PCE effect [100*(111)/(104)] | |||||||||||||||||||
(114) NIPA personal saving rate plus: Direct PCE effect [100*(111)/(104)] - Repayment of non-mortgage debt [100*(112)/(104)] |
Full paper (400K KB PDF) | Data (Excel file 176K KB XLS)