Borrowing Constraints and Homeownership Over the Recent Cycle

27 Pages Posted: 14 Mar 2016

See all articles by Arthur Acolin

Arthur Acolin

University of Washington - College of Built Environments

Jesse Bricker

Board of Governors of the Federal Reserve System

Paul S. Calem

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Finance Department

Date Written: March 11, 2016

Abstract

This paper identifies for the first time the impact of borrowing constraints in the recent decline in homeownership rates. Using data from the Survey of Consumer Finance (SCF), we measure the combined impact of income, wealth and credit constraints on homeownership outcomes over time. It has been established that credit supply loosened during the 2004-07 period and then became considerably more restricted in the wake of the Great Recession. Homeownership has also declined. However, the impact of this tightening of credit on probability of individual households to become homeowners has not previously been estimated. Using estimations of borrowing constraints going back to 2001, we identify the impact of earlier period borrowing constraints compared to those of 2010-13 on population level U.S. homeownership rates.

Keywords: borrowing constraints, homeownership, credit supply

JEL Classification: D12, R21, R31

Suggested Citation

Acolin, Arthur and Bricker, Jesse and Calem, Paul S. and Wachter, Susan M., Borrowing Constraints and Homeownership Over the Recent Cycle (March 11, 2016). Available at SSRN: https://ssrn.com/abstract=2746703 or http://dx.doi.org/10.2139/ssrn.2746703

Arthur Acolin

University of Washington - College of Built Environments ( email )

224 Gould Hall
Box 355726
Seattle, WA 98195
United States

Jesse Bricker

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Paul S. Calem

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Susan M. Wachter (Contact Author)

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
104
Abstract Views
2,434
rank
276,423
PlumX Metrics