Mortgage Choice in the Housing Boom: Impacts of House Price Appreciation and Borrower Type

Credit record panel data from 1999–2010 indicates that the likelihood of home equity extraction (borrowing, on average, about $40,000 against one's home) peaked in 2003 when mortgage rates reached historic lows. We estimate a 27 percent rise in extraction in response to a 100 basis point rate decline, and that house price growth amplifies this relationship. Differential responses to interest rates and home price appreciation by borrower age and credit score provide new evidence of financial frictions. Finally, equity extractions are associated with higher default risk, consistent with the use of borrowed funds for consumption or illiquid investment. (JEL D14, E43, E52, G12, R31)

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Superstar Cities

American Economic Journal Economic Policy ◽

10.1257/pol.5.4.167 ◽

2013 ◽

Vol 5 (4) ◽

pp. 167-199 ◽

Cited By ~ 98

Author(s):

Joseph Gyourko ◽

Christopher Mayer ◽

Todd Sinai

Keyword(s):

Metropolitan Area ◽

Metropolitan Areas ◽

House Prices ◽

Aggregate Demand ◽

House Price ◽

Lower Income ◽

Local Factors ◽

The Past ◽

Long Run ◽

Price Appreciation

We document large long-run differences in average house price appreciation across metropolitan areas over the past 50 years, and show they can be explained by an inelastic supply of land in some unique locations combined with an increasing number of highincome households nationally. The resulting high house prices and price-to-rent ratios in those “superstar” areas crowd out lower income households. The same forces generate a similar pattern among municipalities within a metropolitan area. These facts suggest that disparate local house price and income trends can be driven by aggregate demand, not just changes in local factors such as productivity or amenities. (JEL R11, R23, R31, R52)

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The effect of local amenities on house price appreciation amid market shocks: The case of school quality

Journal of Housing Economics ◽

10.1016/j.jhe.2017.02.003 ◽

2017 ◽

Vol 36 ◽

pp. 62-72 ◽

Cited By ~ 6

Author(s):

Mitchell R. Livy

Keyword(s):

School Quality ◽

House Price ◽

Price Appreciation ◽

Market Shocks

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The Connection Between House Price Appreciation and Property Tax Revenues

National Tax Journal ◽

10.17310/ntj.2008.3.13 ◽

2008 ◽

Vol 61 (3) ◽

pp. 555-572 ◽

Cited By ~ 40

Author(s):

Byron F. Lutz

Keyword(s):

Property Tax ◽

House Price ◽

Tax Revenues ◽

Price Appreciation

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Three essays on China's housing market, monetary policy and macroeconomy

10.32469/10355/70039 ◽

2019 ◽

Author(s):

◽

Yifeng Jia

Keyword(s):

Monetary Policy ◽

Housing Market ◽

Negative Impact ◽

House Price ◽

Housing Price ◽

Policy Instruments ◽

Heterogeneous Effects ◽

Price Appreciation ◽

Economic Stimulus ◽

Monetary Policy Shock

[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT REQUEST OF AUTHOR.] This dissertation studies China's housing market and macroeconomic activity with a strong focus on the role of monetary policy behind the markets. The first two chapters concentrate on the house price dynamics in China. Chapter 1 examines the in influence of monetary policy on China's housing price fluctuation by estimating a VAR model with China's aggregated house price data from 1998Q1 to 2015Q4. The monetary policy shock is identify ed by the sign restriction approach following Uhlig (2005), with the identification assumptions extended to three common policy instruments utilized by the central bank of China: interest rate, required reserve ratio and M2. The results suggest a negative impact of a contractionary monetary policy shock on the house price, and M2 tends to be the most effective monetary instruments in terms of policy transmission. The framework is also extended to examine the link between China's 2008 government economic stimulus plan and the subsequent house price appreciation. The obtained evidence suggests that the economic stimulus props up the house price, but its contribution to the post-2008 house price appreciation is not as prominent as indicated by other relevant studies. However, this discrepancy may be explained by the heterogeneous effects of the stimulus policy on local housing markets across China

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