Julia Fonseca
@JuliaAFonseca
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Assistant Prof of Finance at UIUC @giesbusiness
Joined February 2010
The position will be up to 2 years, shared between UIUC and Wharton (with the option to do the first year remotely or spend the full two years at Wharton). Please apply asap using the link below. The priority deadline is Dec 1, and we will review on a rolling basis.
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🚨New pre-doc position! Come work with @luliu_fin and me on mortgage, housing, and labor markets. We'll be tackling policy-relevant questions with both empirical and structural methods. @econ_ra #EconTwitter
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The April 2023 decision to stop reporting medical debts below $500 on consumer credit reports had no effect on credit access or financial health, from Victor Duarte, @JuliaAFonseca, Divij Kohli, and Julian Reif https://t.co/KPRPInTwmB
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Call for papers for the very 1st UMass Amherst Finance Conference https://t.co/WMYTEnATU7 The conference is on Friday, May 9, 2025 The deadline for submitting your paper is February 1 @econ_conf #econtwitter @UMassAmherst @IsenbergUMass
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Please submit finance, econ, and CS papers to our workshop at ACM Conference on AI in Finance (ICAIF) November in Brooklyn: https://t.co/FCfnsezqj8 A goal: investigate how new ML/simulation tools might solve classic critiques of ABM and address EQUILIBRIUM and self-consistency
sites.google.com
Thank you all for attending this workshop! Slides for select talks are available here. A recording of the session will be available soon.
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I’m thrilled to announce the 2025 WEFIDEV-RFS-CEPR Conference on Finance and Development on March 28th & 29th at LSE. It will be the first of three annual conferences with an RFS dual submission option. Mark your calendars - deadline is Dec 1st! Details:
wefidev.com
The Fall 2025 WEFIDEV Seminar Series has now concluded.
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📢📢! New working paper + podcast alert !📢📢 We study the equilibrium effects of mortgage lock-in on house prices, mobility, and homeownership. See thread by @JuliaAFonseca @pgmabille
I was excited to go back on @theindicator
@planetmoney to talk about a brand new paper with @luliu_fin and @pgmabille ! Mortgage rates have risen sharply from historically low levels while house prices and rents have remained stable. We show mortgage lock-in can explain this.
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That means that raising rates from historically low levels to fight inflation can, in itself, create some inflation through housing markets. Link to podcast: https://t.co/uCnDmyBmSq Link to paper:
npr.org
The Federal Reserve has once again opted to leave interest rates unchanged. That appears to be creating a big challenge to one part of the economy: housing prices. Today, we look at how elevated...
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Lock-in also increases rents if rental supply is sufficiently elastic. Renters who can't move up increase demand for rentals, but less downsizing lowers demand and the net effect is negative. But rental supply declines more as rental yields are driven down by higher house prices.
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We model lock-in as the present-value cost of higher rates, estimated from 2024 data. While higher rates reduce the demand of those who don't move up the housing ladder, mortgage lock-in reduces downsizing and exits from homeownership, increasing net demand and thus house prices.
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To study eqm. effect on prices, we designed a model where households can move between locations differing in avg. wages and costs, and within the housing ladder by renting or owning a starter or trade-up home. House prices and rents are endogenously determined by these decisions.
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In another paper, Lu and I show that locking in low rates compared to market rates reduces mobility. But the result on house prices isn't obvious because a seller who isn't selling is typically also not buying. If both supply and demand go down, the effect on prices isn't clear.
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I was excited to go back on @theindicator
@planetmoney to talk about a brand new paper with @luliu_fin and @pgmabille ! Mortgage rates have risen sharply from historically low levels while house prices and rents have remained stable. We show mortgage lock-in can explain this.
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We also have new results on small business entry and exit, types of moves (moving to better school districts vs. better employment opportunities), and a placebo check for outright owners and renters.
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The sharp rise in rates between 2022-2023 shifted the vast majority of borrowers to the steep portion of the relationship between deltas and moving and, as a result, a given increase in rates has stronger effects on moving.
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Why are lock-in effects stronger in 2022-2024? Our framework shows that moving is sensitive to mortgage rates in the steep part of the figure above, where mortgage deltas (locked-in rate minus current market rate) are below 2 p.p., and the relationship is flat otherwise.
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The housing market is largely frozen in "mortgage lock-in," explains @Wharton professor @LuLiu_Fin to open our four-part Ripple Effect podcast series on real estate. Tune in to the full interview to learn what caused this trend and what could lie ahead: https://t.co/EZqtE0OyGg
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