Logo
Munich Personal RePEc Archive

Mortgage Lending Limits and Housing Demand: Evidence from Bunching in FHA Borrowing

Heilbron, John (2021): Mortgage Lending Limits and Housing Demand: Evidence from Bunching in FHA Borrowing.

[thumbnail of MPRA_paper_125714.pdf] PDF
MPRA_paper_125714.pdf

Download (985kB)

Abstract

I adapt the bunching framework to measure the loan-to-value elasticity of housing demand. Unlike existing literature, my estimator can identify the effect of credit supply while remaining agnostic about how households form beliefs over future housing returns. I measure a statistically significant elasticity of demand, suggesting that households are credit constrained at the time of home purchase. The elasticity is economically small, 14-25bp, suggesting that shocks to credit supply drove housing demand largely through the channel of household beliefs.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.