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Showing results 1 to 10 of approximately 27.
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Working Paper
How Much Does Racial Bias Affect Mortgage Lending? Evidence from Human and Algorithmic Credit Decisions
We assess racial discrimination in mortgage approvals using new data on mortgage applications. Minority applicants tend to have significantly lower credit scores, higher leverage, and are less likely than white applicants to receive algorithmic approval from race-blind government automated underwriting systems (AUS). Observable applicant- risk factors explain most of the racial disparities in lender denials. Further, we exploit the AUS data to show there are risk factors we do not directly observe, and our analysis indicates that these factors explain at least some of the residual 1-2 ...
Working Paper
Student Loans and Homeownership
We estimate the effect of student loan debt on subsequent homeownership in a uniquely constructed administrative dataset for a nationally representative cohort. We instrument for the amount of individual student debt using changes to the in-state tuition rate at public 4-year colleges in the student's home state. A $1,000 increase in student loan debt lowers the homeownership rate by about 1.5 percentage points for public 4-year college-goers during their mid 20s, equivalent to an average delay of 2.5 months in attaining homeownership. Validity tests suggest that the results are not ...
Discussion Paper
The Decline in Lending to Lower-Income Borrowers by the Biggest Banks
Data collected under the Home Mortgage Disclosure Act (HMDA) reveal that the largest banks have significantly reduced their share of mortgage lending to low- and moderate-income (LMI) households in recent years.
Journal Article
The 2014 Home Mortgage Disclosure Act Data
This article provides an overview of the 2014 data reported under the Home Mortgage Disclosure Act of 1975 and analyzes mortgage market activity over time as well as lending patterns across different demographic groups and lender types. The number of home-purchase originations was about 4 percent higher in 2014 than in 2013, while the number of refinance loans was 55 percent lower. We document an increasing share of mortgage loans originated by independent, nondepository mortgage companies. In addition, we analyze the possible effects of recent changes to rules regulating the mortgage market.
Discussion Paper
Changing FHA Mortgage Insurance Premiums and the Effects on Lending
This note explores the effect of changes in Federal Housing Administration (FHA) mortgage insurance premiums (MIP) on mortgage borrowing activity. Reacting to changing conditions in the mortgage market as well as the state of its own balance sheet, the FHA has adjusted its pricing rules a number of times in the wake of the financial crisis.
Discussion Paper
Declining Affordability and Home Purchase Borrowing by Lower Income Households
Recent increases in interest rates, combined with the rapid rise in house prices over the past two years, have eroded the affordability of homeownership. This note provides evidence that home purchase borrowing by below-average income households has fallen precipitously in 2022.
Working Paper
Monetary Policy and Home Buying Inequality
Does monetary policy influence who becomes a home owner? Home purchases by low- and moderate-income households may be particularly sensitive to mortgage interest rates, as these households’ budgets are tighter and they more frequently come up against binding payment-to-income ratio constraints in credit decisions. Exploiting the timing of high-frequency observations of mortgage applicants locking in their interest rates around monetary policy shocks, I find that a 1 percentage point policy-induced increase in mortgage rates lowers the presence of low-income households in the population of ...
Working Paper
The Propagation of Demand Shocks Through Housing Markets
Housing demand stimulus produces a multiplier effect by freeing up owners attempting to sell their current home, allowing them to re-enter the market as buyers and triggering a chain of further transactions. Exploiting a shock to first-time home buyer demand caused by the 2015 surprise cut in Federal Housing Administration mortgage insurance premiums, we find that homeowners buy their next home sooner when the probability of their current home selling increases. This effect is especially pronounced in cold housing markets, in which homes take a long time to sell. We build and calibrate a ...
Journal Article
Residential Mortgage Lending from 2004 to 2015: Evidence from the Home Mortgage Disclosure Act Data
This article provides an overview of the 2015 data reported under the Home Mortgage Disclosure Act of 1975 and analyzes mortgage market activity over time as well as lending patterns across different demographic groups and lender types. The number of home-purchase originations was about 13 percent higher in 2015 than in 2014, and the number of refinance loans was 36 percent higher. The increase in lending was broad based across demographic and income categories.
Working Paper
Monetary Policy and Home Buying Inequality
Does monetary policy influence who becomes a home owner? Home purchases by low- and moderate-income households may be particularly sensitive to mortgage interest rates, as these households’ budgets are tighter and they more frequently come up against binding payment-to-income ratio constraints in credit decisions. Exploiting the timing of high-frequency observations of mortgage applicants locking in their interest rates around monetary policy shocks, I find that a 1 percentage point policy-induced increase in mortgage rates lowers the presence of low-income households in the population of ...