SECONDARY MORTGAGE MARKETS, GSEs, AND THE CHANGING CYCLICALITY OF MORTGAGE FLOWS

Abstract

In recessions, depository institutions accounted for most declines in mortgage flows. Recently, they partially offset their withdrawals from primary markets with accumulations of mortgage-backed securities. Increases in direct flows into agency and private pools also countered the declining flows elsewhere. As the less-procyclical secondary mortgage markets grew and matured, they increasingly stabilized mortgage flows. During periods of international financial crises or of domestic economic stress, GSEs may have been particularly effective in stabilizing mortgage markets and moderating business cycles.

Citation

Peek, J. and Wilcox, J.A. (2003), "SECONDARY MORTGAGE MARKETS, GSEs, AND THE CHANGING CYCLICALITY OF MORTGAGE FLOWS", Research in Finance (Research in Finance, Vol. 20), Emerald Group Publishing Limited, Leeds, pp. 61-80. https://doi.org/10.1016/S0196-3821(03)20004-6