Measuring Mortgage Credit Availability: A Frontier Estimation Approach

Elliot Anenberg, Aurel Hizmo, Edward Kung and Raven S. Molloy
Additional contact information
Elliot Anenberg: https://www.federalreserve.gov/econres/elliot-anenberg.htm
Raven S. Molloy: https://www.federalreserve.gov/econres/raven-molloy.htm

No 2017-101, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We construct a new measure of mortgage credit availability that describes the maximum amount obtainable by a borrower of given characteristics. We estimate this \"loan frontier\" using mortgage originations data from 2001 to 2014 and show that it reflects a binding borrowing constraint. Our estimates reveal that the expansion of mortgage credit during the housing boom was substantial for all borrowers, not only for low-score or low-income borrowers. The contraction was most pronounced for low-score borrowers. Using variation in the frontier across metropolitan areas over time, we show that borrowing constraints played an important role in the recent housing cycle.

Keywords: Constraints; Construction; Credit Availability; Frontier; House prices; Mortgages (search for similar items in EconPapers)
JEL-codes: D12 G10 G21 R20 R21 R31 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2017-09-29
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2017-101

DOI: 10.17016/FEDS.2017.101

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