Credit Supply and Housing Speculation

Atif Mian and Amir Sufi

The Review of Financial Studies, 2022, vol. 35, issue 2, 680-719

Abstract: Credit supply expansion boosts housing speculation and amplifies the housing cycle. The surge in private-label mortgage securitization in 2003 fueled a large expansion in mortgage credit supply by lenders financed with noncore deposits. Areas more exposed to these lenders experienced a large relative rise in transaction volume driven by a small group of speculators, and these areas simultaneously witnessed an amplified housing boom and bust. Consistent with the importance of belief heterogeneity, house price growth expectations of marginal buyers rose during the boom, while housing market pessimism among the general population increased.

JEL-codes: G10 G40 G51 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (18)

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Working Paper: Credit Supply and Housing Speculation (2019)
Working Paper: Credit Supply and Housing Speculation (2018)
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