Borrowing constraints and housing price expectations in the euro area

Miguel Ampudia Fraile and Sergio Mayordomo

Economic Modelling, 2018, vol. 72, issue C, 410-421

Abstract: This paper analyzes the importance of financial constraints on the home ownership decision of European households and their differential effect in periods of positive expectations of housing prices. We document that financial constraints are key drivers of the household homeownership decision being wealth constraints more relevant than income constraints. The wealth constraint is less binding under a scenario in which housing prices exhibit an upward trend.

Keywords: Housing; Financial constraints; Homeownership (search for similar items in EconPapers)
JEL-codes: D14 G21 R21 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:72:y:2018:i:c:p:410-421

DOI: 10.1016/j.econmod.2018.02.015

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