Housing Speculation, GSEs, and Credit Market Spillovers

Natee Amornsiripanitch, Philip E. Strahan, Song Zhang and Xiang Zheng

No 32209, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In 2021, the U.S. Treasury reduced Government Sponsored Enterprises (GSEs) exposure to speculative mortgages. As a result, GSE purchases fell by about 20 percentage points. The policy reduced credit to speculative investors in housing, but increased credit to unaffected parts of the conforming-mortgage market. Banks responded by reallocating provision of speculative mortgage credit across their local markets, which in turn affected their provision of small business credit. These adjustments are most pronounced where banks do not own branches. The results suggest that banks manage credit provision not only in a macro sense – the focus of most research – but also market-by-market.

JEL-codes: G28 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-ban and nep-ure
Note: CF
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Working Paper: HOUSING SPECULATION, GSES, AND CREDIT MARKET SPILLOVERS (2024)
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