Housing, Credit Markets and the Business Cycle
13 Pages Posted: 5 Oct 2007 Last revised: 24 Apr 2022
Date Written: October 2007
Abstract
The housing sector is now (September 2007) at the root of three distinct but related problems: (1) a sharp decline in house prices and the related fall in home building; (2) a subprime mortgage problem that has triggered a substantial widening of all credit spreads and the freezing of much of the credit markets; and (3) a decline in home equity loans and mortgage refinancing that could cause greater declines in consumer spending. Each of these could by itself be powerful enough to cause an economic downturn. The combination could cause a very serious recession unless there are other offsetting forces. In this paper, I discuss each of these and then comment on the implications for monetary policy.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Did Securitization Lead to Lax Screening? Evidence from Subprime Loans
By Benjamin J. Keys, Tanmoy K. Mukherjee, ...
-
The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis
By Atif R. Mian and Amir Sufi
-
The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis
By Atif R. Mian and Amir Sufi
-
Understanding the Subprime Mortgage Crisis
By Yuliya Demyanyk and Otto Van Hemert
-
Assessing High House Prices: Bubbles, Fundamentals, and Misperceptions
-
Assessing High House Prices: Bubbles, Fundamentals, and Misperceptions
-
Understanding the Securitization of Subprime Mortgage Credit
By Adam B. Ashcraft and Til Schuermann
-
Housing Supply and Housing Bubbles
By Edward L. Glaeser, Joseph Gyourko, ...
-
Housing Supply and Housing Bubbles
By Edward L. Glaeser, Joseph Gyourko, ...
-
Urban Growth and Housing Supply
By Edward L. Glaeser, Joseph Gyourko, ...