The Impact of Housing Markets on Consumer Debt: Credit Report Evidence from 1999 to 2012

Meta Brown, Sarah Stein and Basit Zafar

Journal of Money, Credit and Banking, 2015, vol. 47, issue S1, 175-213

Abstract: We estimate the response of consumer debt portfolios to pronounced housing market swings from 1999 to 2012 using Equifax‐sourced credit report data and a variety of identification approaches. We find: (i) the extraordinary climb in home equity debt from 2002 to 2006 is an expression of a stable, longer‐term relationship between house price growth and home equity borrowing; (ii) all preboom homeowners, and older and prime postboom homeowners, demonstrate near dollar‐for‐dollar substitution between (expensive) credit card and (cheap) home equity debt in response to home equity changes; and (iii) little evidence of substitution between home equity and student loan debt.

Date: 2015
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https://doi.org/10.1111/jmcb.12198

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Working Paper: The impact of housing markets on consumer debt: credit report evidence from 1999 to 2012 (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:47:y:2015:i:s1:p:175-213

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