EconoMonitor

Market Share of Mortgage Debt Outstanding

Mark Thoma is frustrated to see some commentators once again push the view that Fannie and Freddie caused the economic crisis. When this issue arose back in late 2008, Richard Green’s figure on the share of mortgage debt outstanding held by type of institution settled the debate for me.  That figure showed the GSE’s share declined during the housing boom while the asset-back security issuers’ share increased.  Here is an updated and slightly modified version of that figure: (Click on figure to enlarge.)

Source

The data is unambiguous here: Fannie and Freddie were not the immediate cause of the housing boom.   They may be guilty of a number of things, but directly causing the housing boom is not one of them.


This post originally appeared at Macro and Other Market Musings and is reproduced here with permission.

Comments are closed.

Most Read | Featured | Popular

Blogger Spotlight

Richard Wood Richard Wood

Richard has published papers on wages policy, the taxation of financial arrangements and macroeconomic issues in Pacific island countries. Views expressed in these articles are his own and may not be shared by his employing agency. He is the author of How to Solve the European Economic Crisis: Challenging orthodoxy and creating new policy paradigms