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Brewing bubbles: how mortgage practices intensify housing booms

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  • Leonard I. Nakamura

Abstract

Even before the Great Recession, housing market bubbles have been associated with severe financial crises around the world. Why do these booms and busts occur? Leonard Nakamura explains that part of the answer may lie with how mortgage lending practices appear to respond to rising and falling house prices in somewhat unexpected ways.

Suggested Citation

  • Leonard I. Nakamura, 2014. "Brewing bubbles: how mortgage practices intensify housing booms," Business Review, Federal Reserve Bank of Philadelphia, issue 1, pages 16-24.
    • Handle: RePEc:fip:fedpbr:00006
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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/business-review/2014/q1/brQ114_brewing_bubbles.pdf
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    References listed on IDEAS

    as
    1. Wenli Li & Fang Yang, 2010. "American dream or American obsession? The economic benefits and costs of homeownership," Business Review, Federal Reserve Bank of Philadelphia, issue Q3, pages 20-30.
    2. Keys, Benjamin J. & Mukherjee, Tanmoy & Seru, Amit & Vig, Vikrant, 2009. "Financial regulation and securitization: Evidence from subprime loans," Journal of Monetary Economics, Elsevier, vol. 56(5), pages 700-720, July.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    4. Giovanni Dell’ariccia & Deniz Igan & Luc Laeven, 2012. "Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 367-384, March.
    5. Brueckner, Jan K. & Calem, Paul S. & Nakamura, Leonard I., 2012. "Subprime mortgages and the housing bubble," Journal of Urban Economics, Elsevier, vol. 71(2), pages 230-243.
    6. Jan K. Brueckner & Paul S. Calem & Leonard I. Nakamura, 2016. "House‐Price Expectations, Alternative Mortgage Products, and Default," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(1), pages 81-112, February.
    7. William Goetzmann & Liang Peng & Jacqueline Yen, 2012. "The Subprime Crisis and House Price Appreciation," The Journal of Real Estate Finance and Economics, Springer, vol. 44(1), pages 36-66, January.
    8. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    9. Gadi Barlevy & Jonas D. M. Fisher, 2010. "Mortgage choices and housing speculation," Working Paper Series WP-2010-12, Federal Reserve Bank of Chicago.
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