New Research Sheds Light on How Housing Filters Through the Market

Filtering is described in a new paper by researchers at the Federal Home Loan Mortgage Corporation (Freddie Mac)) as "the process by which properties, as they age, depreciate in quality and hence price and thus tend to be purchased by lower-income households."

"This is the primary mechanism by which competitive markets supply low-income housing," adds the abstract of the paper before revealing findings that reveal new insight into how, where, and when housing filters in the market. The report's main takeaway: that there's a great deal of variety in filtering rates both across and within metropolitan statistical areas. "Notably, in some markets, properties “filter up” to higher-income households," adds the abstract.

Len Keifer, deputy chief economist at Freddie Mac and a colleague of the study's authors, took to Twitter to provide more insight into the study's findings.