Credit Market Spillover Effects to the Real Economy: Evidence from Rental Housing Evictions

62 Pages Posted: 19 Dec 2020 Last revised: 12 Aug 2022

See all articles by Brent W. Ambrose

Brent W. Ambrose

Pennsylvania State University

Xudong An

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Luis A. Lopez

University of Illinois at Chicago

Date Written: August 11, 2022

Abstract

We present novel evidence showing how the financing choice of landlords impacts eviction decisions in rental markets. Since multifamily loans rely on timely rental payments, strict underwriting factors can increase the chances that landlords withstand income shocks. Lender provided relief may further create leeway for landlords to work with tenants who default on rent. Using data on U.S. evictions and commercial multifamily mortgages, we document a negative relation between evictions and debt financing by the government-sponsored enterprises, which impose strict underwriting criteria but offer borrowers relief during unprecedented income shocks. We also quantify eviction risks induced by the COVID-19 pandemic for select cities.

Keywords: Evictions, Rental Housing, Multifamily Mortgages, GSE, COVID-19

JEL Classification: G28, R30, I38

Suggested Citation

Ambrose, Brent W. and An, Xudong and Lopez, Luis A., Credit Market Spillover Effects to the Real Economy: Evidence from Rental Housing Evictions (August 11, 2022). Available at SSRN: https://ssrn.com/abstract=3745974 or http://dx.doi.org/10.2139/ssrn.3745974

Brent W. Ambrose (Contact Author)

Pennsylvania State University ( email )

University Park, PA 16802-3306
United States
814-867-0066 (Phone)
814-865-6284 (Fax)

Xudong An

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

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Luis A. Lopez

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

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