Mortgage volume and macroeconomic factors: Evidence from Turkey

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

Buying vs. Renting a Home in View of Young Adults in Poland

The deteriorating housing situation of young adults in many countries has become a subject of global interest. Researchers point to a number of factors that influence young adults’ decisions to own or rent a home. This paper examines the relationship between young adults’ inclination to own their own home and a range of different socio-economic factors. The study is of a quantitative-qualitative nature and was based on the results of a computer-assisted web interview (CAWI) questionnaire. The survey was conducted among young Poles aged 18–45 (n = 983). To analyse the results of the questionnaires, a logistic regression was used in which 24 different dichotomous and categorical variables were considered. Taking into account a number of individual characteristics (e.g., gender, education, hometown population size, etc.), the results show, for example, that single individuals and those with a higher level of tolerance for mortgage interest rates are more likely to own a home than to rent. This result highlights the desirability of easier access to mortgage credit. At the other end of the spectrum are those living with parents and those with dependents. The results imply that they are less interested in buying a home. Interestingly, declarations of a lack of funds for an own contribution when buying a new house/dwelling, or reluctance to expose oneself to financial difficulties throughout one’s life, do not discourage young adults from striving for their own dwelling, which further demonstrates the need to create appropriate mechanisms/instruments to facilitate the purchase of a dwelling for young adults.

Effectiveness of Implementation of Government Programs and Regional Measures to Support Mortgages in Volgograd Region

The article is devoted to the analysis of mortgage lending in Volgograd region in terms of compliance of the implemented mortgage programs to ensure affordability of mortgage lending for the residents of the region. The relevance of the topic of the study is connected with the need to develop mortgage lending in Volgograd region and increase the efficiency of mortgage programs. The purpose of this article is to identify problems and study promising possibilities to maintain the availability of mortgage loans for citizens of Volgograd region. The article analyzes the state and trends of mortgage lending development in the region from the position of solving the problems of its strategic social and economic development. The authors study state mortgage programs existing in the region. It was shown that these programs are not effective enough, and a number of problems that hinder their further development were identified, namely: decline in real incomes of the population; insufficient funding of public mortgage programs; inefficient use of budget funds in the implementation of mortgage programs; decline in number of houses put in service in the region; bankruptcy of construction companies; monopolization of the construction market of the region; high cost of dwelling units and mortgages; high share of families in need of improved housing conditions. To solve these problems, it is suggested to change the methodology for financing state mortgage programs, reduce mortgage interest rates for residents of Volgograd region to an optimal level. The mentioned measures will help to increase the efficiency of mortgage programs and mortgage affordability for citizens. At the same time, it is of particular importance that the suggested measures are universal in nature and can be used for the development of mortgage lending in other regions.

HOUSE PRICES, RENTAL COSTS, AND MORTGAGE INTEREST RATES

Studies have typically adopted the price-rent ratio to determine whether housing exuberance exists and the periods of imbalance between house prices and rental costs. Using the price-rent ratio to conduct tests without considering the effects of mortgage interest rates on user costs may overestimate episodes of exuberance. This study uses data of the overall housing market and those of 10 major metropolitan statistical areas (MSAs) in the United States from 1979Q1 to 2018Q1 to evaluate whether housing exuberance exists in the markets; the results indicate that all the MSAs experienced episodes of exuberance at different times and the overall housing U.S. market was overheated from 1998Q2 to 2007Q3. By considering mortgage rates and using the user-cost-rent ratio, we further determine that short-term housing exuberance emerged in only two MSAs, Los Angeles and Miami, in 2006Q2, which was followed by immediate corrections. Thus, the research results of this study signify that only use the price-rent ratio to determine whether or not rational housing tenure choice made by traders exists is not sufficient. This study provides evidence showing that the method incorporating mortgage interest rates tends to obtain an equilibrium relationship between the rental and housing markets, indicating interest rates play an important role in housing tenure choice.

ANALISIS PERMINTAAN KREDIT MODAL USAHA PADA BANK PEMERINTAH DI SUMATERA UTARA

This research aims to analyze the influence of GDP, interest rate, CPI and the amount of deposits to the credit demand of venture capital to the state bank in North Sumatra simultaneously and partially. The data used are secondary data sourced from North Sumatra Bank of Indonesia variables namely GDP, interest rate, CPI and the number of deposit and loan capital of North Sumatra Province, on a quarterly basis from 2003 till , 2011. Data analysis was performed using OLS (Ordinary Least Square) with multiple linear regression models estimated with the help of the program Eviews 5.1. The results of this research can be concluded that simultaneous co-GDP variables constant change, the consumer price index, interest rate, and the amount of deposits significantly affect credit demand in the capital of North Sumatra Province. Furthermore, partially concluded that variables GDP, and the amount of deposits a positive effect on demand for capital loans, while the CPI and the variable mortgage interest rates negatively affect credit demand in the capital of North Sumatra Province. The results also showed that the most dominant variable effect on credit demand in the province of North Sumatra capital is the amount of deposits.

Creating a Development Bank to Finance Affordable Housing in South Africa is a Timely Catalyst to Address Demand and Supply Challenges

The twin problems of affordability and accessibility that hamper the progress of housing in our country need to be addressed on a sustainable basis and the state needs to take on the role as a facilitator to create the enabling environment to encourage greater private sector participation. As a consequence, it is quite opportune to establish the Human Settlements Development Bank (HSDB). The mortgage finance affordability challenge is also attributable to key essential drivers, namely; house price index, disposable income, and the mortgage interest rates.

How Quantitative Easing Works: Evidence on the Refinancing Channel

We document the transmission of large-scale asset purchases by the Federal Reserve to the real economy using rich borrower-linked mortgage-market data and an identification strategy based on mortgage market segmentation. We find that central bank QE1 MBS purchases substantially increased refinancing activity, reduced interest payments for refinancing households, led to a boom in equity extraction, and increased aggregate consumption. Relative to QE-ineligible jumbo mortgages, QE-eligible conforming mortgage interest rates fell by an additional 40 bp and refinancing volumes increased by an additional 56% during QE1. We estimate that households refinancing during QE1 increased their durable consumption by 12%. Our results highlight that the transmission of unconventional monetary policy to the real economy depends crucially on the composition of assets purchased and the degree of segmentation in the market.

Are Home Buyers Inattentive? Evidence from Capitalization of Energy Costs

This paper explores whether home buyers are attentive to energy costs. The cost-effectiveness of market-based pollution policies crucially depends on whether consumers are attentive to energy costs when purchasing energy-using durables. I exploit energy-cost variation from fuel-price changes in Massachusetts where there is significant overlap in the geographic and age distributions of oil-heated and gas-heated homes. The results strongly reject that home buyers are unresponsive to energy costs under a wide range of consumption and discount-rate assumptions. Furthermore, my preferred specification is consistent with full capitalization of fuel expenditures at discount rates similar to mortgage interest rates. (JEL D14, L71, Q41, Q53, Q58, R31)

ИПОТЕЧНЫЙ ЖИЛИЩНЫЙ КРЕДИТ КАК ФАКТОР ПОВЫШЕНИЯ МИГРАЦИОННОЙ ПРИВЛЕКАТЕЛЬНОСТИ ДАЛЬНЕВОСТОЧНОГО РЕГИОНА

В статье обозначена одна из самых больших проблем развития Дальневосточного региона – уменьшение численности населения. Представлены итоги миграции и сравнительная характеристика социально-экономических показателей субъектов Дальневосточного федерального округа. Отмечено, что ипотечное жилищное кредитование является одним из инструментов, который способствует уменьшению оттока населения из региона. Представлена динамика процентной ставки по ипотечному жилищному кредиту. Проведён анализ и представлена модель прогнозирования объёмов ипотечного жилищного кредита на примере При-морского края. Для моделирования объёмов ипотечного жилищного кредита были использованы две комбинированные аддитивные модели: первая – модель множественной линейной регрессии и авторегрессионной модели временного ряда для остатков; вторая – модель с выявлением тренда, расчётом сезонной компоненты и моделью авторегрессии для случайной компоненты. Сравнительный анализ ошибок моделей показал, что лучшей является вторая модель, ей соответствуют минимальные ошибки, поэтому она была выбрана для прогнозирования. Прогноз был дополнен анализом тенденции изменения численности населения в Приморском крае, который показал, что рост объёмов ипотечного жилищного кредита происходит на фоне уменьшения численности населения, следовательно, жители региона заключают большое количество ипотечных сделок на приобретение квартир за пределами Дальневосточного региона. Рост средней суммы ипотечного займа означает, что уменьшается объём собственных средств на покупку квартиры. В то же время снижается и количество выданных кредитов. Рост объёмов ипотечного жилищного кредита при снижении их количества свидетельствует о том, что возможности накопления первоначального взноса значительно уменьшились. В целом ипотечное кредитование является перспективным направлением повышения миграционной привлекательности региона. Региональное жилищное ипотечное кредитование – источник получения доходов для бюджета; расширение рынка занятости для строителей, проектировщиков; решение проблем со строительством жилья нуждающимся слоям населения; возможность перехода свободных денежных средств и накоплений населения в инвестиции. Но проблема уменьшения численности населения в регионе требует системного решения не только социальных, но также экономических и экологических проблем и не может быть решена только уменьшением процентных ставок на ипотечные кредиты. The article reviews on pf the most challenging issues for the development of the Russian Far East – the population decrease. The authors have decried the migration outcomes and the comparative characteristics of social and economic indicators of the subjects of Russian Far Eastern Federal District. Mortgage credits are a tool of reducing the migration outflow from the region. The article reviews the dynamics of mortgage interest rates and the model of forecasting the mortgage credit volumes based on the Primorye data. Forecasting the volumes of mortgage credits was conducted with two combined adaptive models: the model of multiple linear regression and the autoregressive model of the time sequence for remainders; the second model involves revealing the trends, calculating the seasonal component and the autoregressive model for the random component. Comparative analysis of model errors has shown that the second model is the best one due to the low number of errors; therefore, it was selected for forecasting. The forecast was supplemented with the analysis of population changes trends in Primorye that has showed that the growth of mortgage credit volumes was accompanied by the population decrease. This means that the residents of the region take a lot of mortgage credits for purchasing apartments outside the territory of the Far Eastern region. Growth of the average mortgage amount indicates that the people’s personal funds for initial instalments have decreased. At the same time, the number of approved credits is going down. Increase in the volumes of mortgage credits in the context of their lower amounts indicates that people have fewer opportunities for accumulating initial installments. In the whole, mortgage crediting is a prospective trend in increasing the migration attractiveness of the region. Regional mortgage crediting is a source of income for the budget; expanding the employment market for construction workers and architects; solving the housing problems for the low-income population strata; an opportunity for transferring the free cash and savings into investments. However, the problem of population decrease calls for a systemic approach to social, economic and environmental problems and cannot be resolved through lower mortgage interest rates alone.