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House prices and the allocation of consumer credit

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  • Mingzhu Tai

Abstract

While housing market booms improve homeowners' credit access, they could constrain credit availability to renters. Using individual‐level consume credit data, I show that renters have poorer credit access if they live in locations where lenders are more exposed to housing booms and extend more mortgage lending to homeowners across the country. This suggests a reallocation of credit from renters to homeowners. As a result, renters end up using more expensive alternative credit, default more, and also experience lower consumption. This reallocation of credit during the boom also affect renters' financial well‐being in the subsequent bust.

Suggested Citation

  • Mingzhu Tai, 2025. "House prices and the allocation of consumer credit," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 53(4), pages 869-899, July.
    • Handle: RePEc:bla:reesec:v:53:y:2025:i:4:p:869-899
    DOI: 10.1111/1540-6229.12536
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