1. Refinancing Inequality During the COVID-19 Pandemic.
- Author
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Agarwal, Sumit, Chomsisengphet, Souphala, Kiefer, Hua, Kiefer, Leonard C., and Medina, Paolina C.
- Subjects
COVID-19 pandemic ,MORTGAGE refinancing ,INCOME inequality ,INTEREST rates ,SAVINGS - Abstract
During the first half of 2020, the difference in savings from mortgage refinancing between high- and low-income borrowers was 10 times higher than before. This was the result of two factors: high-income borrowers increased their refinancing activity more than otherwise comparable low-income borrowers and, conditional on refinancing, they captured slightly larger improvements in interest rates. Refinancing inequality increases with the severity of the COVID-19 pandemic and is characterized by an underrepresentation of low-income borrowers in the pool of applications. We estimate a difference of $5 billion in savings between the top income quintile and the rest of the market. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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