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Julia Fonseca
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Julia Fonseca
@JuliaAFonseca
Associate Prof of Finance at UIUC @giesbusiness
juliafonseca.com
Joined February 2010
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  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Mar 7, 2024
    The average mortgage borrower has locked in a rate that is well below current rates. @luliu_fin and I show that this locks homeowners into their homes, making them less likely to move. The White House is proposing a new tax credit to try to unlock the lock-in. A quick thread:
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    Julia Fonseca
    @JuliaAFonseca
    Jun 18, 2024
    @luliu_fin and I updated our mortgage lock-in paper to show that a 1 p.p. decline in the difference between mortgage rates locked in at origination and current rates reduces moving by 16% between 2022-2024, compared to 9% between 2010-2024.
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    Julia Fonseca
    @JuliaAFonseca
    Aug 18, 2023
    Had a great time talking to the folks at NPR’s @theindicator about mortgage lock in and my work with @luliu_fin. In 10 min, we touch on why mortgage lock in is so important, what @luliu_fin and I find, and the policy implications and trade offs:
    npr.org
    When mortgage rates are too low to give up : The Indicator from Planet Money
    The average mortgage rate in the U.S. just hit 7.09%—its highest level in more than two decades. And that's having ripple effects in the wider economy. Some homeowners feel locked in, tethered to...
    7.6K
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    Julia Fonseca
    @JuliaAFonseca
    Oct 7, 2017
    Replying to @AtifRMian
    Really cool video! There's actually work using deep learning to solve macro and finance models: papers.ssrn.com/sol3/papers.cf…
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    May 3, 2024
    First-time homebuyers are facing 3 related challenges: high mortgage rates, high house prices, and low inventory. How can policymakers help? @luliu_fin and I wrote our thoughts on this for MarketWatch, informed by our work on mortgage lock-in.
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    Julia Fonseca
    @JuliaAFonseca
    Apr 25, 2024
    Come work with @luliu_fin and me on exciting and policy-relevant topics in household finance!
    user avatar
    Lu Liu
    @luliu_fin
    Apr 25, 2024
    @JuliaAFonseca and I have an exciting new pre-doc opportunity to work with us on mortgage, housing and labor markets, which will involve both empirical and structural work, and tackling public policy questions! Please share. @econ_ra #EconTwitter
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    Julia Fonseca
    @JuliaAFonseca
    Sep 7, 2017
    Replying to @nomadj1s @agoodmanbacon and 4 others
    Thank you all for doing this. Really helpful and encouraging!
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Apr 27, 2021
    Replying to @toniwhited
    I found it really helpful!
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Mar 7, 2024
    Replying to @JuliaAFonseca
    First, 80-90% of sales are of existing homes, and both the buyer and the seller typically have mortgages. For the owner of a starter home to sell, they will have to find another home to buy. If the price of this home is above the median, its seller isn't eligible for the credit.
    368
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Aug 31, 2023
    Replying to @HannoLustig and @degryse_hans
    That’s right! Mortgages in the US are generally not portable and only FHA, USDA, and VA mortgages are assumable.
    216
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    Julia Fonseca
    @JuliaAFonseca
    Jul 21, 2022
    Replying to @JHB_econ
    Thanks!! 😊
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Jun 18, 2024
    Replying to @JuliaAFonseca
    Link to updated draft: papers.ssrn.com/sol3/papers.cf…
    681
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Mar 7, 2024
    Replying to @JuliaAFonseca
    But that leads us to the second reason: the tax credit isn't very large relative to how much low mortgage rates are worth to borrowers. @luliu_fin and I estimate that the average borrower would need $50k to compensate them for giving up the rate that they've locked in.
    393
  • user avatar
    Julia Fonseca
    @JuliaAFonseca
    Mar 7, 2024
    Replying to @JuliaAFonseca
    Freddie Mac also estimated this dollar value and put it at $66k, similar to our estimate. The maximum tax credit of $10k is small relative to this amount, so it might not be enough to incentivize even one seller to sell, let alone two.
    771

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