Does Credit Quality Matter for Homeownership?
AbstractIt has been long recognized that there are a number of barriers that limit access to homeownership for some households, most importantly, downpayment constraints. This paper extends the literature to test for the role of credit quality in limiting access to homeownership. Results show that both wealth and credit quality based constraints significantly reduce the likelihood of whether individuals and households opt to own a home. The wealth constraint has the largest impact, although its importance declined substantially during the 1990s due to the increased availability of low-downpayment mortgages. In contrast to the declining influence of wealth-based constraints, credit quality based constraints have become more important barriers to homeownership during the 1990s, mostly reflecting an increase in the number of households with impaired credit quality.
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Bibliographic InfoPaper provided by Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania in its series Zell/Lurie Center Working Papers with number 410.
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Other versions of this item:
- NEP-ALL-2003-05-18 (All new papers)
- NEP-MFD-2003-05-18 (Microfinance)
- NEP-URE-2003-05-18 (Urban & Real Estate Economics)
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- Peter M. Zorn, 1989. "Mobility-Tenure Decisions and Financial Credit: Do Mortgage Qualification Requirements Constrain Homeownership?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(1), pages 1-16.
- Roberto G. Quercia & George W. McCarthy & Susan M. Wachter, .
"The Impacts Of Affordable Lending Efforts On Homeownership Rates,"
Zell/Lurie Center Working Papers
405, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
- Quercia, Roberto G. & McCarthy, George W. & Wachter, Susan M., 2003. "The impacts of affordable lending efforts on homeownership rates," Journal of Housing Economics, Elsevier, vol. 12(1), pages 29-59, March.
- Roberto G. Quercia & George W. McCarthy & Susan M. Wachter, . "The Impacts of Affordable Lending Efforts on Home Ownership Rates," Zell/Lurie Center Working Papers 304, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
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- Robert B. Avery & Raphael W. Bostic & Paul S. Calem & Glenn B. Canner, 1996. "Credit risk, credit scoring, and the performance of home mortgages," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 621-648.
- Robert B. Avery & Paul S. Calem & Glenn B. Canner, 2003. "An overview of consumer data and credit reporting," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Feb, pages 47-73.
- Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
- Peter Linneman & Susan Wachter, 1989. "The Impacts of Borrowing Constraints on Homeownership," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(4), pages 389-402.
- Bostic, Raphael W & Surette, Brian J, 2001. "Have the Doors Opened Wider? Trends in Homeownership Rates by Race and Income," The Journal of Real Estate Finance and Economics, Springer, vol. 23(3), pages 411-34, November.
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