Susan M Wachter

Susan M Wachter
  • Albert Sussman Professor of Real Estate
  • Professor of Finance

Contact Information

  • office Address:

    430 Vance Hall
    3733 Spruce Street
    Philadelphia, PA 19104

Research Interests: housing finance, real estate economics, urban economics

Links: CV, Personal Website

Overview

Consulting

Real Estate Markets – Jones Lang LaSalle;  Mortgage Insurance Markets – GE Financial.

Career and Recent Professional Awards; Teaching Awards

American Real Estate and Urban Economics Lifetime Achievement Award 2005; American Real Estate and Urban Economics Best International Paper Award 1995; Undergraduate Division Excellence in Teaching Award, 1991; Lindback Award for Distinguished Teaching, University of Pennsylvania, 1975; Anvil Award for Teaching Excellence, 1974

Academic Positions Held

Wharton: 1972-present; named Albert Sussman Professor of Real Estate July 2013;  (Richard B. Worley Professor of Financial Management, 2003-2013); Chairperson, Real Estate Department, 1997-2000; Director, Wharton Geographical Information Systems Lab, 1995-present). University of Pennsylvania: (Co-director of Penn Institute for Urban Research, 2004-Present; Professor of City and Regional Planning, 1995-present; Ombudsman, 1987-90). Previous appointment: Bryn Mawr College. Visiting appointment: Singapore Management University (Celia Moh Visiting Professor, 2004)

Professional Leadership

Board of Editors, Journal of Housing Economics, 2003-present; Board of Editors, Housing Policy Debate, 2003-present; Board of Editors, Journal of Real Estate and Finance, 2003-present; Board of Editors, Journal of Real Estate Research, 2004-present; Board of Editors, Journal of Housing Research, 2006; Homer Hoyt Institute Faculty Fellow, 2003-present

Corporate and Public Sector Leadership

Financial Research Advisory Committee, Office of Financial Research, U.S. Department of the Treasury 2016-present; Global Urban Development Advisory Board; National Research Council Review Board on HUD Research 2008; Advisory Board for Regulatory Research, National Association of Homebuilders, 2005-2006; Board of Directors, American Real Estate and Urban Economics Association, 2003-2006; Blue Ribbon Committee on Housing Finance, 2005-2006

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Research

  • Susan M Wachter and Patricia A. McCoy (2018), Why Cyclicality Matters to Access to Mortgage Credit,, Vol. 27 (Boston College Journal of Law and Social Justice), pp. 261-394.

  • Arthur Acolin, Xudong An, Raphael Bostic, Susan M Wachter (2017), Homeownership and Nontraditional and Subprime Mortgages, Housing Policy Debate, 27 (3), pp. 393-418.

    Abstract: This article documents the growth and geographic distribution of nontraditional mortgages (NTMs) and subprime mortgages during 2000-2006, and examines the association between these products and homeownership at the county level between 2000 and 2012. It finds a significant relationship between the origination of NTM and subprime mortgages during the boom and changes in the number of homeowners (positive during the 2000-2006 period and negative during the 2006-2012 period) but no significant relationship with the change in the homeownership rate. Looking at specific categories of the population, the results indicate a positive relationship between the presence of NTMs and subprime mortgages and increased numbers of homeowners for young households as well as for low income and minority households, but the relationship is smaller than for the general population. Overall, the relationship between NTMs and homeownership is stronger than the relationship between subprime mortgages and homeownership during the boom and it is less negative during the bust.

  • Susan M Wachter, Arthur Acolin, Scott Bernstein (2017), Opportunity, Housing Access, and Infrastructure, Housing Policy Debate, 27 (3), pp. 468-471.

  • Susan M Wachter and Arthur Acolin (2017), Housing and Opportunity, Penn IUR Brief.

  • Arthur Acolin and Susan M Wachter (2017), Opportunity and Housing Access, Cityscape, 19 (1), pp. 135-149.

    Abstract: This article examines the relationship between employment opportunity and housing affordability. Access to locations with high-productivity jobs is increasingly limited by regional housing affordability barriers. Recent articles demonstrate a new regional divergence in access to high-productivity regions accompanied by declines in worker mobility associated with affordability barriers. We update these findings and discuss their long-term implications for economic opportunity and intergenerational welfare. We show that areas, from which lower-income households are increasingly priced out, are also more likely to have higher levels of intergenerational mobility. Access to opportunity also continues to be challenged within metropolitan areas as the gentrification of downtown neighborhoods is accompanied by an increase in concentrated poverty in outlying city neighborhoods and inner ring suburbs. These trends on regional and local scales derive from the increased importance of place in the knowledge-based economy and interact to reinforce growing spatial inequality. We conclude with a discussion of the importance of identifying place-based solutions to counter growing spatial inequality of opportunity.

  • Susan M Wachter and Patricia Mccoy, “Representations and Warranties: Why They Did Not Stop the Crisis”. In Evidence and Innovation in Housing Law and Policy, Cambridge, U.K.: Cambridge University Press, forthcoming, edited by Lee Fennell and Benjamin Keys, (2017)

  • Andrey Pavlov, Eva M. Steiner, Susan M Wachter (2016), REIT Financing Choices: Preparation Matters, Forthcoming: Real Estate Economics.

  • Susan M Wachter, Andrey Pavlov, Eva M. Steiner (2016), The Consequences of REIT Index Membership for Return Patterns, Real Estate Economics (Forthcoming).

  • Arthur Acolin, Laurie S. Goodman, Susan M Wachter (2016), A Renter or Homeowner Nation?, Cityscape, Volume 18, pp. 145-158.

    Abstract: This article performs an exercise in which we identify the potential impact of key drivers of homeownership rates on homeownership outcomes by 2050. We take no position on whether these key determinants in fact will come about. Rather we perform an exercise in which we test for their impact. We demonstrate the result of shifts in three key drivers for homeownership forecasts: demographics (projected from the census), credit conditions (reflected in the fast and slow scenarios), and rents and housing cost increases (based on California). Our base case average scenario forecasts a decrease in homeownership to 57.9 percent by 2050, but alternate simulations show that it is possible for the homeownership rate to decline from current levels of around 64 percent to around 50 percent by 2050, 20 percentage points less than at its peak in 2004. Projected declines in homeownership are about equally due to demographic shifts, continuation of recent credit conditions, and potential rent and house price increases over the long term. The current and post WW II normal of two out of three households owning may also be in our future: if credit conditions improve, if (as we move to a majority-minority nation) minorities’ economic endowments move toward replicating those of majority households, and if recent rent growth relative to income stabilizes.

  • Arthur Acolin, Jesse Bricker, Paul Calem, Susan M Wachter, Borrowing Constraints During the Housing Bubble.

    Abstract: This paper identifies for the first time the impact of borrowing constraints in the recent decline in homeownership rates. Using data from the Survey of Consumer Finance (SCF), we measure the combined impact of income, wealth and credit constraints on homeownership outcomes over time. It has been established that credit supply loosened during the 2004-07 period and then became considerably more restricted in the wake of the Great Recession. Homeownership has also declined. However, the impact of this tightening of credit on probability of individual households to become homeowners has not previously been estimated. Using estimations of borrowing constraints going back to 2001, we identify the impact of earlier period borrowing constraints compared to those of 2010-13 on population level U.S. homeownership rates.

Teaching

Past Courses

  • BEPP236 - INT HOUSING COMPARISONS

    This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential market-oriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

  • BEPP836 - INT'L HOUSING COMPARISNS

    This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses in development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential market-oriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

  • FNCE399 - INDEPENDENT STUDY

    Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.

  • FNCE899 - INDEPENDENT STUDY

    Independent Study Projects require extensive independent work and a considerable amount of writing. ISP in Finance are intended to give students the opportunity to study a particular topic in Finance in greater depth than is covered in the curriculum. The application for ISP's should outline a plan of study that requires at least as much work as a typical course in the Finance Department that meets twice a week. At a minimum, we need a description of the methodology you intend to employ, a bibliography and description of the data that you will use as well as a list of interim deliverables and dates to ensure that you complete the project within the semester. Applications for FNCE 899 ISP's will not be accepted after the THIRD WEEK OF THE SEMESTER. You must submit your Finance ISP request using the Finance Department's ISP form located at https://fnce.wharton.upenn.edu under the Course ISP section

  • REAL215 - URBAN REAL ESTATE ECON

    Urban Real Estate Economics uses economic concepts to analyze real estate markets, values and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and an optional second exam.

  • REAL236 - INT'L HOUSING COMPARISNS

    This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on the development of securitization markets and addresses the current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and market-oriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

  • REAL399 - INDEPENDENT STUDY

    All independent studies must be arranged and approved by a Real Estate department faculty member.

  • REAL724 - URBAN REAL ESTATE ECON

    Urban Real Estate Economics uses economic concepts to analyze real estate markets, values, and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and optional second exam.

  • REAL836 - INT'L HOUSING COMPARISNS

    This course analyzes housing finance systems and housing market outcomes across the globe. In the US, the course focuses on development of securitization markets and addresses current challenges of housing finance reform, including the future of Fannie Mae and Freddie Mac. Internationally, the course covers issues of access to housing and housing informality in developing countries, financial crises arising out of the housing sector, and potential market-oriented and public policy solutions. The course features a wide array of speakers in finance, government and academia who contribute their perspectives to pressing issues of mortgage market design.

  • REAL899 - INDEPENDENT STUDY

    All independent studies must be arranged and approved by a Real Estate Department faculty member.

  • REAL945 - URBAN REAL ESTATE ECON

    Urban Real Estate Economics uses economic concepts to analyze real estate markets, values, and trends. The course focuses on market dynamics in the U.S. and internationally, with an emphasis on how urban growth and local and federal government policies impact urban development and real estate pricing. A group development project gives hands on experience, and invited guest speakers bring industry knowledge. Besides the group project and presentation, problem sets are required along with a midterm and optional second exam. All PhD students will be expected to complete a research paper in addition to the successful completion of the course examination requirements.

  • REAL995 - DISSERTATION

Awards and Honors

  • American Real Estate and Urban Economics Lifetime Achievement Award, 2005
  • Presidential Appointment, Senate Confirmation, Assistant Secretary, HUD, 1998-2001
  • Best Published Paper (Real Estate Economics), 1996

In the News

Knowledge @ Wharton

Activity

Latest Research

Susan M Wachter and Patricia A. McCoy (2018), Why Cyclicality Matters to Access to Mortgage Credit,, Vol. 27 (Boston College Journal of Law and Social Justice), pp. 261-394.
All Research

In the News

A New Chance for Housing Finance Reform

Recent proposals on how to restructure the $4.5 trillion secondary mortgage market show a growing consensus about how to avoid another housing crisis.

Knowledge @ Wharton - 2016/08/23
All News

Awards and Honors

American Real Estate and Urban Economics Lifetime Achievement Award 2005
All Awards