Housing markets and economic growth:

Housing markets and economic growth:lessons from the US refinancing boom
Akash Deep and Dietrich Domanski

Household spending remained unexpectedly strong in the OECD area during the 2001 downturn. One explanation is that it was supported by rising real estate values and declining mortgage rates, mainly in the English-speaking countries.2 Such resilience was particularly remarkable for the United States, where overall household wealth declined because of falling equity prices. The US mortgage market appears to have played a significant role in this strength. There was a wave of mortgage refinancing in 2001 that was unique in both its nature and magnitude. This special feature discusses the effect of mortgage refinancing during the 2001 slowdown and the role played by changes in the structure of the market for housing finance.