How Resilient Is the U.S. Housing Market Now

Housing is by far the most important asset for most households, and, not coincidentally, housing debt dwarfs other household liabilities. The relationship between housing debt and housing values figures significantly in financial and macroeconomic stability, as events during the housing bust of 2006-12 clearly demonstrated. This week, Liberty Street Economics presents five posts touching on various aspects of housing, from the changing relationship between mortgage debt and housing equity to the future of homeownership. In today?s post, we provide estimates of housing equity and explore how vulnerable households are to declines in house prices, using methods introduced in our paper ?Tracking and Stress Testing U.S. Household Leverage.?