Author: John V. Duca
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 0
Book Description
Most US house price models break down in the mid-2000's, due to the omission of exogenous changes in mortgage credit supply (associated with the sub-prime mortgage boom) from house price-to-rent ratio and inverted housing demand models. Previous models lack data on credit constraints facing first-time home-buyers. Incorporating a measure of credit conditions--the cyclically adjusted loan-to-value ratio for first time buyers--into house price to rent ratio models yields stable long-run relationships, more precisely estimated effects, reasonable speeds of adjustment and improved model fits.
House Prices and Credit Constraints
Author: John V. Duca
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 0
Book Description
Most US house price models break down in the mid-2000's, due to the omission of exogenous changes in mortgage credit supply (associated with the sub-prime mortgage boom) from house price-to-rent ratio and inverted housing demand models. Previous models lack data on credit constraints facing first-time home-buyers. Incorporating a measure of credit conditions--the cyclically adjusted loan-to-value ratio for first time buyers--into house price to rent ratio models yields stable long-run relationships, more precisely estimated effects, reasonable speeds of adjustment and improved model fits.
Publisher:
ISBN:
Category : Housing
Languages : en
Pages : 0
Book Description
Most US house price models break down in the mid-2000's, due to the omission of exogenous changes in mortgage credit supply (associated with the sub-prime mortgage boom) from house price-to-rent ratio and inverted housing demand models. Previous models lack data on credit constraints facing first-time home-buyers. Incorporating a measure of credit conditions--the cyclically adjusted loan-to-value ratio for first time buyers--into house price to rent ratio models yields stable long-run relationships, more precisely estimated effects, reasonable speeds of adjustment and improved model fits.
Shifting credit standards and the boom and bust in US house prices
Author: John V. Duca
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
Book Description
How House Price Dynamics and Credit Constraints Affect the Equity Extraction of Senior Homeowners
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Housing Market Dynamics
Author: François Ortalo-Magné
Publisher:
ISBN:
Category : Credit
Languages : en
Pages : 60
Book Description
Publisher:
ISBN:
Category : Credit
Languages : en
Pages : 60
Book Description
Housing, Consumption, and Credit Constraints
Author: Andreas Lehnert
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 72
Book Description
"I test the credit-market effects of housing wealth shocks by estimating the consumption elasticity of house price shocks among households in different age quintiles. Younger households face faster expected income growth and hence would like to borrow more than older households. I estimate consumption elasticities from housing wealth by age quintile to be (4; 0; 3; 8; 3) percent. As predicted by theory, the youngest group has a higher elasticity of consumption than the next two age quintiles. That the consumption of the age quintile on the verge of retirement is responsive to housing wealth is also not surprising: I show that these households are likeliest to "downsize" their house and thus realize any capital gains"--Abstract.
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 72
Book Description
"I test the credit-market effects of housing wealth shocks by estimating the consumption elasticity of house price shocks among households in different age quintiles. Younger households face faster expected income growth and hence would like to borrow more than older households. I estimate consumption elasticities from housing wealth by age quintile to be (4; 0; 3; 8; 3) percent. As predicted by theory, the youngest group has a higher elasticity of consumption than the next two age quintiles. That the consumption of the age quintile on the verge of retirement is responsive to housing wealth is also not surprising: I show that these households are likeliest to "downsize" their house and thus realize any capital gains"--Abstract.
The Effect of Credit Constraints on Housing Prices
Author: Tom Cusbert
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Housing Wealth and Consumption
Author: S. Borağan Aruoba
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Housing Market Dynamics
Author: François Ortalo-Magné
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
Book Description
This paper presents a dynamic theory of housing market fluctuations. It develops a life-cycle model where households are heterogeneous with respect to income and preferences, and mortgage lending is restricted by a down-payment requirement. The market interaction of young credit-constrained households with older or richer unconstrained households generates the following results. (1) Current income of young credit-constrained households affects housing prices independently of aggregate income. (2) Housing prices and the number of housing transactions are positively correlated. (3) Housing prices over-react to income shocks. (4) A relaxation of the down-payment constraint triggers a boom-bust cycle. These results are consistent with patterns observed in the US and the UK.
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
Book Description
This paper presents a dynamic theory of housing market fluctuations. It develops a life-cycle model where households are heterogeneous with respect to income and preferences, and mortgage lending is restricted by a down-payment requirement. The market interaction of young credit-constrained households with older or richer unconstrained households generates the following results. (1) Current income of young credit-constrained households affects housing prices independently of aggregate income. (2) Housing prices and the number of housing transactions are positively correlated. (3) Housing prices over-react to income shocks. (4) A relaxation of the down-payment constraint triggers a boom-bust cycle. These results are consistent with patterns observed in the US and the UK.
Financial Constraints and House Prices
Author: Heitor Almeida
Publisher:
ISBN:
Category : Cash flow
Languages : en
Pages : 292
Book Description
Publisher:
ISBN:
Category : Cash flow
Languages : en
Pages : 292
Book Description
Financial Frictions in a Housing Economy
Author: Marcus Mølbak Ingholt
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
More than a decade has now passed since rapidly declining house prices triggered a global financial crisis that developed into a global recession, the speed and depth of which were unprecedented in recent history. The overarching objective of this Ph.D. thesis is to improve our understanding of how simple price adjustments in the housing market could cause havoc to the functioning of the global economy to such an extent. At first sight, it may not be obvious that housing markets matter greatly for aggregate economic activity. For instance, residential investments constitute a small share - 4.4 pct. in the United States (U.S.) and 5.4 pct. in Denmark - of the gross domestic product.1 However, real estate, in addition to providing housing services to families, serves as collateral on mortgage loans, home equity loans, and home equity lines of credit. A corollary of this servitude is that the supply of collateralized credit to homeowners expands and contracts roughly proportionally to the house price cycle. In consequence, house prices may act as impetuses that stimulate and depress economic activity (Kiyotaki and Moore, 1997; Iacoviello, 2005). This collateral channel - in conjunction with other mechanisms linking house prices, credit, and real activity - constitute the theoretical foundation of the thesis. The thesis consists of three self-contained chapters, in addition to this introduction. All chapters focus on the U.S. economy, but have implications that reach well beyond this scope.
Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
More than a decade has now passed since rapidly declining house prices triggered a global financial crisis that developed into a global recession, the speed and depth of which were unprecedented in recent history. The overarching objective of this Ph.D. thesis is to improve our understanding of how simple price adjustments in the housing market could cause havoc to the functioning of the global economy to such an extent. At first sight, it may not be obvious that housing markets matter greatly for aggregate economic activity. For instance, residential investments constitute a small share - 4.4 pct. in the United States (U.S.) and 5.4 pct. in Denmark - of the gross domestic product.1 However, real estate, in addition to providing housing services to families, serves as collateral on mortgage loans, home equity loans, and home equity lines of credit. A corollary of this servitude is that the supply of collateralized credit to homeowners expands and contracts roughly proportionally to the house price cycle. In consequence, house prices may act as impetuses that stimulate and depress economic activity (Kiyotaki and Moore, 1997; Iacoviello, 2005). This collateral channel - in conjunction with other mechanisms linking house prices, credit, and real activity - constitute the theoretical foundation of the thesis. The thesis consists of three self-contained chapters, in addition to this introduction. All chapters focus on the U.S. economy, but have implications that reach well beyond this scope.