Review of Financial Studies Vol. 35 No. 2 2022
Credit Supply and Housing Speculation
open access
Abstract
Credit supply expansion boosts housing speculation and amplifies the housing cycle. The surge in private-label mortgage securitization in 2003 fueled a large expansion in mortgage credit supply by lenders financed with noncore 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.
- DOI
- 10.1093/rfs/hhab034
- Volume
- 35
- Issue
- 2
- Pages
- 680-719
- Language
- en
- Sources
- crossref bibtex:phds-export.bib openalex