Why is Housing Finance Still Stuck in Such a Primitive Stage?

Cowles Foundation for Research in Economics Yale University

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Date Published 2014
Primary Author Robert Shiller
Other Authors
Theme Mortgage Products, Housing Finance Education and Research


The institutions for financing owner-occupied housing have not progressed as they should, and the financial innovation that has followed the financial crisis of 2007-9 has not been focused on improving the risk management of individual homeowners. This paper lists a number of barriers to housing finance innovation, and in light of these barriers, the problems of some major innovations of the past and future: self-amortizing mortgages, price-level adjusted mortgages (PLAMs), shared appreciation mortgages (SAMs), housing partnerships, and continuous workout mortgages (CWMs).

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