In last year’s stress test, which featured a severe global recession that included a decline in home prices of over 20 percent, we projected the largest banks could collectively maintain capital ratios at more than double their minimum requirements—even after withstanding more than $ billion in losses.
I am hopeful that at least some of the pandemic-specific factors pushing up home prices and rents could begin to ease in the next year or so. The level of new housing units completed in 2021 was higher than at any point since 2007.