Home price growth and minority access to mortgage credit

Salman Tahsin

Journal of Economics and Business, 2022, vol. 120, issue C, No S0148619522000121

Abstract: This paper examines the relationship between home price growth and mortgage lending standards for minority applicants during the 2001–2006 (pre-crisis) and 2012–2017 (post-crisis) periods. Using the housing supply elasticity measure by Saiz (2010) to instrument for home price growth, I find that minorities in metropolitan areas with home price appreciation experienced looser mortgage lending standards during the pre-crisis period but tighter lending standards during the post-crisis years. Moreover, there was a greater increase in minority loan acceptance rate relative to non-minority loan acceptance rate in these areas during the pre-crisis period. The results suggest that home price appreciation improved minority access to mortgage credit through lower lending standards during the pre-crisis years.

Keywords: Home price growth; Residential lending standards; Minority borrowers; Subprime loans; Mortgage supply (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:120:y:2022:i:c:s0148619522000121

DOI: 10.1016/j.jeconbus.2022.106056

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