Home price growth and minority access to mortgage credit
Journal of Economics and Business
This paper examines the relationship between home price growth and mortgage lending standards for minority applicants during the 2001–2006 (pre-crisis) and 2012–2017 (post-crisis) periods. Using the housing supply elasticity measure by Saiz (2010) to instrument for home price growth, I find that minorities in metropolitan areas with home price appreciation experienced looser mortgage lending standards during the pre-crisis period but tighter lending standards during the post-crisis years. Moreover, there was a greater increase in minority loan acceptance rate relative to non-minority loan acceptance rate in these areas during the pre-crisis period. The results suggest that home price appreciation improved minority access to mortgage credit through lower lending standards during the pre-crisis years.
Home price growth, Minority borrowers, Mortgage supply, Residential lending standards, Subprime loans
Accounting and Finance
Salman Tahsin. "Home price growth and minority access to mortgage credit" Journal of Economics and Business (2022). https://doi.org/10.1016/j.jeconbus.2022.106056