Credit Supply and Housing Speculation

Atif Mian and Amir Sufi
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Amir Sufi: University of Chicago

Working Papers from Princeton University. Economics Department.

Abstract: Speculation is a critical channel through which credit supply expansion affects the housing cycle. The surge in private label mortgage securitization in 2003 fueled a large expansion in mortgage credit supply by lenders financed with non-core 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.

Keywords: Speculation; Housing; Credit supply; Mortgage (search for similar items in EconPapers)
JEL-codes: E03 E44 G01 G12 G2 G4 R21 R31 (search for similar items in EconPapers)
Date: 2019-03
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Credit Supply and Housing Speculation (2022)
Working Paper: Credit Supply and Housing Speculation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2019-23

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