Our latest Policy Perspective written by Richard Cooperstein offers an analysis of the U.S. housing and mortgage finance markets, focusing on key trends and forward-looking risks. While housing markets are not fully efficient, they do respond to economic imbalances which create opportunities and vulnerabilities. This article explores how demographic shifts, credit access, interest rates, and climate risks shape both housing demand and supply.

Key findings include:

• Weak demand fundamentals, especially among new homeowners
• Easing supply shortages and slowing price growth
• Elevated risk of broader housing price declines amid rising recession concerns
• Notable exposure of higher-coupon mortgages and servicing rights to interest rate and credit risks

Cooperstein also assess the resilience of mortgage-related assets under current and projected conditions.

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