Climate Change Concerns and Mortgage Lending

67 Pages Posted: 16 Sep 2019 Last revised: 27 Nov 2023

See all articles by Tinghua Duan

Tinghua Duan

IESEG School of Management

Frank Weikai Li

Singapore Management University - Lee Kong Chian School of Business

Date Written: April 27, 2021


We examine whether beliefs about climate change affect loan officers’ mortgage lending decisions. We show that abnormally high local temperature leads to elevated attention to and belief in climate change in a region. Loan officers approve fewer mortgage applications and originate lower amounts of loans in abnormally warm weather. This effect is stronger among counties heavily exposed to the risk of sea-level rise, during periods of heightened public attention to climate change, and for loans originated by small lenders. Additional tests suggest that the negative relation between temperature and approval rate is not fully explained by changes in local economic conditions and demand for mortgage credit, or deteriorating quality of loan applicants. By contrast, Fintech lenders partially fill the gap in demand left by traditional lenders when local temperature is abnormally high.

Keywords: Climate Change, Global Warming, Mortgage Lending, Temperature Anomaly

JEL Classification: G40, G41, Q54

Suggested Citation

Duan, Tinghua and Li, Frank Weikai, Climate Change Concerns and Mortgage Lending (April 27, 2021). Journal of Empirical Finance, Forthcoming, Available at SSRN: or

Tinghua Duan (Contact Author)

IESEG School of Management ( email )

Socle de la Grande Arche
1 Parvis de la Defense
Puteaux, Paris 92800

Frank Weikai Li

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409

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