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Bank-specific shocks and house price growth in the U.S

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  • Bremus, Franziska
  • Krause, Thomas
  • Noth, Felix

Abstract

This paper investigates the link between mortgage supply shocks at the banklevel and regional house price growth in the U.S. using micro-level data on mortgage markets from the Home Mortgage Disclosure Act for the 1990-2014 period. Our results suggest that bank-specific mortgage supply shocks indeed affect house price growth at the regional level. The larger the idiosyncratic shocks to newly issued mortgages, the stronger is house price growth. We show that the positive link between idiosyncratic mortgage shocks and regional house price growth is very robust and economically meaningful, however not very persistent since it fades out after two years.

Suggested Citation

  • Bremus, Franziska & Krause, Thomas & Noth, Felix, 2017. "Bank-specific shocks and house price growth in the U.S," IWH Discussion Papers 3/2017, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:32017
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    1. Dursun-de Neef, H. Özlem, 2023. "Bank specialization, mortgage lending and house prices," Journal of Banking & Finance, Elsevier, vol. 151(C).

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    More about this item

    Keywords

    house prices; idiosyncratic shocks; granularity; credit supply;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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