Working Paper Revision
Credit and Housing Price Effects of Automated Underwriting Adoption
Abstract: We study how the 1990s adoption of now widely-used automated mortgage underwriting systems affected credit, 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 house price synchronization. Together, our results illustrate how new lending technology can generate systematic credit supply shocks, influencing house prices and increasing market interconnectedness.
JEL Classification: G21; L85; R21; R31;
https://doi.org/10.24149/wp2506r2
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Provider: Federal Reserve Bank of Dallas
Part of Series: Working Papers
Publication Date: 2026-05-04
Number: 2506
Note: Previous versions of this paper circulated under the titles "Financial Technology and the 1990s Housing Boom" and "Automated Underwriting and Housing Market Dynamics."
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- Working Paper Original (2025-01-17) : Financial Technology and the 1990s Housing Boom