The Slow Process of De-leveraging Household Mortgage Debt

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Written By H. Pike Oliver

A post at the Calculated Risk blog includes the chart copied below which shows that while home prices have declined as a percent of gross development product, mortgage balances still have a long way to go.

As Jacob Goldstein pointed out in an NPR Planet Money post on this topic on June 9, 2011, a 2010 study found that de-leveraging often takes as long as the credit boom that preceded it. That study, by the husband and wife economic team of Carmen and Vicent Reinhart, concludes that the recent mortgage credit boom lasted for about a decade, and ended in 2007. If de-leveraging takes as long as leveraging up did, it could take until 2016 before household mortgage debt falls back in line with pre-bubble residential real estate values.

H. Pike Oliver

Born and raised in the San Francisco Bay Area, H. Pike Oliver has worked on real estate development strategies and master-planned communities since the early 1970s, including nearly eight years at the Irvine Company. He resided in the City of Irvine for five years in the 1980s and nine years in the 1990s.

As the founder and sole proprietor of URBANEXUS, Oliver works on advancing equitable and sustainable real estate development and natural lands management. He is also an affiliate instructor at the Runstad Department of Real Estate at the University of Washington.

Early in his career, Oliver worked for public agencies, including the California Governor’s Office of Planning and Research where he was a principal contributor to An Urban Strategy for California. Prior to relocating to Seattle in 2013, Oliver taught real estate development at Cornell University and directed the undergraduate program in urban and regional studies. He is a member of the Urban Land Institute, the American Planning Association and a founder and emeritus member of the California Planning Roundtable.

Oliver is a graduate of the urban studies and planning program at San Francisco State University and earned a master’s degree in urban planning at UCLA.

https://urbanexus.com
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