Geographic and Temporal Variation in Housing Filtering Rates

49 Pages Posted: 26 Feb 2020 Last revised: 21 Apr 2020

See all articles by Liyi Liu

Liyi Liu

Federal Home Loan Mortgage Corporation (FHLMC)

Douglas A. McManus

Federal Home Loan Mortgage Corporation (FHLMC)

Elias Yannopoulos

Federal Home Loan Mortgage Corporation (FHLMC)

Date Written: January 27, 2020

Abstract

In Housing Economics, filtering is the process by which properties, as they age, depreciate in quality and hence price and thus tend to be purchased by lower-income households. This is the primary mechanism by which competitive markets supply low-income housing. While at the national level filtering is an important long-term source of lower-income housing, this research shows that there is a wide range of filtering rates both across and within metropolitan statistical areas (MSAs) for owner-occupied properties. Notably, in some markets, properties “filter up” to higher-income households. This paper contributes to our understanding of filtering by demonstrating the heterogeneity of filtering rates. The analysis finds strong geographic and temporal variation in filtering rates.

Keywords: filtering, affordable housing, repeat income model

JEL Classification: R21, R31, R38

Suggested Citation

Liu, Liyi and McManus, Douglas A. and Yannopoulos, Elias, Geographic and Temporal Variation in Housing Filtering Rates (January 27, 2020). Available at SSRN: https://ssrn.com/abstract=3527800 or http://dx.doi.org/10.2139/ssrn.3527800

Liyi Liu

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States

Douglas A. McManus (Contact Author)

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States
703-903-2953 (Phone)

Elias Yannopoulos

Federal Home Loan Mortgage Corporation (FHLMC) ( email )

8200 Jones Branch Road
McLean, VA 22101
United States

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