The FRED Blog has discussed the dwindling supply of multifamily dwellings with 2 to 4 units. This trend even has its own name: the “missing middle.” Today, we tap into newly added data from the Federal Reserve Bank of Philadelphia to offer additional insights into this segment of the housing market.
Our FRED graph above shows the share of mortgage balances that are 60 or more days past due, broken down by property type:
- single family (solid blue line)
- condo/co-op (dotted light blue line)
- 2 to 4 units (dashed orange line)
- townhouse/planned (dashed-dotted purple line).
Quarterly data are available since 2013. Between then and the time of this writing, overdue mortgage payments for multi-family housing with 2 to 4 units have consistently been more frequent than for any other type of residential property.
What could explain this pattern? Research coauthored by Raphael Bostic from the Atlanta Fed notes that small and medium multifamily properties are the majority of rental units across the country and also house the largest percentage of the lowest-income households. Disruptions to the flow of rental income—whether from vacancy, nonpayment, or broad economic downturns—are likely to increase the risk of mortgage delinquency.
To learn more about the role of housing on the economic well-being of US households, read this report from the Board of Governors of the Federal Reserve System.
How this graph was created: Search FRED for and select “Large Bank Consumer Mortgage Balances: 60 or More Days Past Due by Property Type: Accounts Based: Single Family.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Large Bank Consumer Mortgage Balances: 60 or More Days Past Due by Property Type: Accounts Based: Condo / Co-op.” Be sure to click “Add data series.” Repeat the last two steps to add the other two data series: “Large Bank Consumer Mortgage Balances: 60 or More Days Past Due by Property Type: Accounts Based: 2-4 Units” and “Large Bank Consumer Mortgage Balances: 60 or More Days Past Due by Property Type: Accounts Based: Townhouse / Planned.”
Suggested by Sarah Lepkowitz and Diego Mendez-Carbajo.