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Dynamics of housing debt in the recent boom and great recession

Publication ,  Journal Article
Adelino, M; Schoar, A; Severino, F
Published in: NBER Macroeconomics Annual
January 1, 2018

This paper documents a number of key facts about the evolution of mortgage debt, homeownership, debt burden, and subsequent delinquency during the recent housing boom and Great Recession. We show that the mortgage expansion was shared across the entire income distribution; that is, the flow and stock of debt rose across all income groups (except for the top 5%). The mortgage expansion was especially pronounced in areas with increased house prices, and the speed at which houses turned over (churn) in these areas went up significantly. However, the average loan-to-value ratios (LTV) at origination did not increase over the boom period. While homeownership rates increased for the middle- and upper-income households, there was no increase in homeownership for the lowest income groups. Finally, default rates postcrisis went up predominantly in areas with large house price drops, especially for high-income and high-FICO borrowers. These results are consistent with a view that the run-up in mortgage debt over the precrisis period was driven by rising home values and expectations of increasing prices.

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Published In

NBER Macroeconomics Annual

DOI

EISSN

1537-2642

ISSN

0889-3365

Publication Date

January 1, 2018

Volume

32

Issue

1

Start / End Page

265 / 311

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3801 Applied economics
  • 1401 Economic Theory
 

Citation

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Adelino, M., Schoar, A., & Severino, F. (2018). Dynamics of housing debt in the recent boom and great recession. NBER Macroeconomics Annual, 32(1), 265–311. https://doi.org/10.1086/696054
Adelino, M., A. Schoar, and F. Severino. “Dynamics of housing debt in the recent boom and great recession.” NBER Macroeconomics Annual 32, no. 1 (January 1, 2018): 265–311. https://doi.org/10.1086/696054.
Adelino M, Schoar A, Severino F. Dynamics of housing debt in the recent boom and great recession. NBER Macroeconomics Annual. 2018 Jan 1;32(1):265–311.
Adelino, M., et al. “Dynamics of housing debt in the recent boom and great recession.” NBER Macroeconomics Annual, vol. 32, no. 1, Jan. 2018, pp. 265–311. Scopus, doi:10.1086/696054.
Adelino M, Schoar A, Severino F. Dynamics of housing debt in the recent boom and great recession. NBER Macroeconomics Annual. 2018 Jan 1;32(1):265–311.
Journal cover image

Published In

NBER Macroeconomics Annual

DOI

EISSN

1537-2642

ISSN

0889-3365

Publication Date

January 1, 2018

Volume

32

Issue

1

Start / End Page

265 / 311

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3801 Applied economics
  • 1401 Economic Theory