Upon Further Analysis — Archives
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AFS, HTM, and Unintended Consequences
Federal Reserve Vice-Chair Michael Barr has proposed requiring banks over $100 billion to incorporate unrealized losses on available-for-sale securities in regulatory capital. Taking these unrealized losses into account better reflects the banks’ actual loss absorbing capacity. However, if the experience with the banks already subject to this requirement is any indication, it will have the…
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Mortgage Rates, Affordability, and Housing Prices
With mortgage rates hovering near 7%, it’s worth looking at their impact on housing affordability. Higher financing costs reduce affordability and create downward pressure on home prices. The impact of higher rates on affordability has been obvious, but the impact on housing prices is more complicated. Mortgage rates are up from under 3% at the…