Working Paper Revision
Automated Underwriting and Housing Market Dynamics
Abstract: We study how the 1990s adoption of now widely-used automated mortgage underwriting systems affected credit supply, house prices and their comovement across locations. The effects go well beyond processing improvements. By implementing more complex, statistically-informed lending rules, the systems allowed households to borrow more, pushing up house prices. Furthermore, by transmitting a common set of credit standards across lenders, the new technology increased credit and house price synchronization. Together, our results illustrate how new lending technology can generate correlated credit supply shocks, contributing to house price booms and increasing market interconnectedness.
JEL Classification: G21; L85; R21; R31;
https://doi.org/10.24149/wp2506r1
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Provider: Federal Reserve Bank of Dallas
Part of Series: Working Papers
Publication Date: 2025-12-23
Number: 2506
Note: An earlier draft of this paper circulated under the title "Financial Technology and the 1990s Housing Boom."
Related Works
- Working Paper Revision (2025-12-23) : You are here.
- Working Paper Original (2025-01-17) : Financial Technology and the 1990s Housing Boom