Housing Wealth Reallocation Between Subprime and Prime Borrowers During Recessions
Ayse Sapci () and
No 2017-03, Working Papers from Department of Economics, Colgate University
We study a general equilibrium model with a housing market to understand the role of credit access among borrowers and show that an adverse financial shock can increase the asymmetry in the housing wealth distribution of subprime and prime borrowers. Households with better credit access can take advantage of the low housing prices during recessions, especially when the subprimers are previously subjected to lax credit conditions. Our model is consistent with the data since the late 1980s, showing that the homeownership rates of the two groups move in opposite directions during turmoils as prime borrowers are more likely to invest in the housingmarket during recessions.
Date: 2017-03-01, Revised 2017-09-19
New Economics Papers: this item is included in nep-ban, nep-dge and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: HOUSING WEALTH REALLOCATION BETWEEN SUBPRIME AND PRIME BORROWERS DURING RECESSIONS (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cgt:wpaper:2017-03
Access Statistics for this paper
More papers in Working Papers from Department of Economics, Colgate University Contact information at EDIRC.
Bibliographic data for series maintained by Chad Sparber ().