Temporal Focal Points and Economic Outcomes Evidence from U.S. Mortgage Lending

Marco Giacoletti, Rawley Heimer and Edison Yu

No 26-18, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Temporal focal points shape high-stakes economic outcomes. We investigate this proposition in the U.S. mortgage market by documenting novel within-month patterns in lending. Using confidential Home Mortgage Disclosure Act (HMDA) data, we show that applications arrive smoothly throughout the month, yet approximately half of all originations occur in the final week. The Black approval gap, 2.4 percentage points unexplained at the start of the month, narrows to zero by month’s end. Underperforming loan officers and high-turnover lending institutions amplify this convergence. Demand-side factors, such as borrower financial constraints, also increase end-of-month volume, but the sensitivity does not vary meaningfully by applicant group

Pages: 71
Date: 2026-04-01
New Economics Papers: this item is included in nep-hre
Note: Supersedes WP 21-04/R
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DOI: 10.21799/frbp.wp.2026.18

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