The subprime crisis and its role in the financial crisis

Anthony Sanders

Journal of Housing Economics, 2008, vol. 17, issue 4, 254-261

Abstract: This paper discusses some of the key characteristics of the U.S. subprime mortgage boom and bust and discusses the causes, particularly related to the relationship between subprime mortgage defaults and housing prices. We observe that housing prices and mortgage defaults had distinctly localized trends, but those trends ceased by 2005 when several states studied in this paper (Arizona, California and Nevada) began to move together. Furthermore, we observe the seriously delinquent subprime mortgages increased much more rapidly than was anticipated by historically-based econometric models. As such, this paper offers a partial explanation for how financial institutions misunderstood the declining house prices and increasing subprime default.

Keywords: Housing; Subprime; lending; Defaults (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1051-1377(08)00036-3
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:17:y:2008:i:4:p:254-261

Access Statistics for this article

Journal of Housing Economics is currently edited by H. O. Pollakowski

More articles in Journal of Housing Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().