We show five new results about small and medium-sized real estate investors (SMREI) who participate through legal entities in U.S. housing markets. First, SMREI have the largest growth across all cities post Great Recession, in contrast to Wall Street Landlords who concentrate in superstar cities. Second, SMREI increase house price growth and price-to-income ratio, especially in the bottom price-tier. Third, this effect is reversed as investors trigger a medium-run supply response. Fourth, in areas with a high supply elasticity, SMREI affect rents more than prices. Finally, SMREI change the composition of the housing stock in favor of multi-family units.

Using a new financial product, the Credit Risk Transfers (CRTs) issued by Fannie Mae and Freddie Mac, we study how markets would price hurricane risk in mortgages, absent government intervention. Currently, this intervention implies that climate risk is priced equally in agency mortgages, even though such risk is location specific. We hand collect a novel and detailed database to exploit CRTs' heterogeneous exposure to Hurricanes Harvey and Irma. Using a diff-in-diff specification we estimate the reaction of private investors to hurricane risk. We use the previous results to calibrate a model of mortgage lending. Then, we simulate hurricane frequencies and mortgage default probabilities in each U.S. county to derive the market price of mortgage credit risk, that is, the implied guarantee-fees (g-fees). Market-implied g-fees would be 10% higher than the current g-fees in counties most exposed to hurricanes and 35% lower in inland counties.

Analyzing a near-universe sample of conventional, conforming mortgages in the United States originated and securitized between 2018 and 2019, we find that single women pay higher mortgage rates and up-front fees, and they are less likely to refinance when interest rates decrease compared to single men. This gender gap in mortgage costs and refinancing behavior is especially notable in affluent neighborhoods with high incomes, levels of education, and socioeconomic status. Part of this gap can be attributed to differences in math scores between genders during elementary and middle school, and gender gaps in financial literacy skills, which increase with income and education. These findings align with prevailing gender stereotypes and societal norms, contributing to disparities in financial sophistication that result in comparatively less favorable financial outcomes for women.

This paper conducts a large-scale data analysis to compare investors' purchases of single-family homes in the periods before and after the Global Financial Crisis (GFC). We find that post-GFC investors differ from pre-GFC investors in several key ways: The investors prefer to purchase in locations with high rental yields. They have a buy-hold strategy as they are less likely to sell in response to realized capital gains. The purchase of properties is less likely to use leverage, but when they do, the observed loan-to-value ratios are comparable to levels used by pre-GFC investors. They are residents in wealthier and more educated areas, and more sophisticated. These differences make them less susceptible to behavioral biases, which has implications for market liquidity, monetary policy transmission sensitivity, and inflation hedging.

We analyze housing finance reform in a model calibrated with data from the market of Credit Risk Transfers (CRTs) linked to U.S. mortgages. We quantify the historical difference between the CRT market-implied g-fee (i.e. the price of mortgage credit risk) and the one that Fannie and Freddie (the GSEs) actually charged. The differences are small most of the time except for the Great Recession and the onset of Covid-19. By subsidizing mortgage rates in times of market distress, the GSEs stabilize the housing market. By calibrating a macro model, we compare and show commensurate outcomes relative to Fed stabilization policy.

We investigate the effect of forbearance policies on the cost of mortgage credit. From a theoretical perspective, the effect is unclear. We hand-collect a rich database on mortgage Credit Risk Transfers (CRT). We study the 2020 CARES Act that grants borrowers the right to forbearance by submitting a request to mortgage servicers for forbearance due to financial hardship during the COVID-19 emergency.  We find that credit spreads increase on average 3 to 4 times, even more in states that already have longer foreclosure procedures. That is, credit markets expect forbearance policies to cause larger losses for lenders. 

We analyze a rich database of Credit Risk Transfers (CRTs) issued by the Government Sponsored Enterprises (GSEs). The CRTs are structured securities that have been the main innovation to fulfill the Dodd-Frank Act mandate. They affect mortgage rates as they guide mortgage g-fees. We show that CRT funding composition affects CRT pricing. Since the creation of the CRT market in 2013, money market funds and mutual funds (MF) have been the main buyers of these securities. However, we show that this pattern changed during the COVID years and then again in 2022. During the COVID years MF dramatically expanded their share in the purchases of CRTs. Then, in 2022, right after they experienced large outflows in their assets under management, the share of CRT purchases by MF collapsed towards the bottom of their historical range. Hedge funds are the main buyers that either replace or are replaced by MF. The change in the composition of CRT buyers has pricing implications.  We estimate that a standard deviation increase in the MF share implies around 10% lower average CRT spreads, controlling for many other factors. Spreads increase when hedge funds buy the CRTs. These results have important implications for who should bear mortgage credit risk and for the U.S. housing finance system.