TY  - JOUR
AU  - Adelino, Manuel
AU  - Schoar, Antoinette
AU  - Severino, Felipe
TI  - Dynamics of Housing Debt in the Recent Boom and Great Recession
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 23502
PY  - 2017
Y2  - June 2017
DO  - 10.3386/w23502
UR  - http://www.nber.org/papers/w23502
L1  - http://www.nber.org/papers/w23502.pdf
N1  - Author contact info:
Manuel Adelino
Fuqua School of Business
Duke University
100 Fuqua Drive
Durham, NC 27708
Tel: 919/660-7981
E-Mail: manuel.adelino@duke.edu

Antoinette Schoar
MIT Sloan School of Management
100 Main Street, E62-638
Cambridge, MA  02142
Tel: 617/253-3763
Fax: 617/258-6855
E-Mail: aschoar@mit.edu

Felipe Severino
Tuck School of Business
Dartmouth College
100 Tuck Hall
Hanover, NH 03755
E-Mail: felipe.severino@tuck.dartmouth.edu
M1  - published as Manuel Adelino, Antoinette Schoar, Felipe Severino. "Dynamics of Housing Debt in the Recent Boom and Great Recession," in Martin Eichenbaum and Jonathan A. Parker, editors, "NBER Macroeconomics Annual 2017, volume 32" University of Chicago Press (2018)

M3  - presented at "32nd Annual Conference on Macroeconomics", April 7-8, 2017
AB  - This paper documents a number of key facts about the evolution of mortgage debt, homeownership, debt burden and subsequent delinquency during the recent housing boom and Great Recession. We show that the mortgage expansion was shared across the entire income distribution, i.e. the flow and stock of debt rose across all income groups (except for the top 5%). The mortgage expansion was especially pronounced in areas with increased house prices, and the speed at which houses turned over (churn) in these areas went up significantly. However, the average loan-to-value ratios (LTV) at origination did not increase over the boom period. While homeownership rates increased for the middle and upper income households, there was no increase in homeownership for the lowest income groups. Finally, default rates post-crisis went up predominantly in areas with large house price drops, especially for high income and high- FICO borrowers. These results are consistent with a view that the run up in mortgage debt over the pre-crisis period was driven by rising home values and expectations of increasing prices.
ER  -