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SSRN Electronic Journal
Article . 2014 . Peer-reviewed
Data sources: Crossref
EconStor
Research . 2014
Data sources: EconStor
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The Causal Effect of House Prices on Mortgage Demand and Mortgage Supply

Authors: Basten, Christoph; Koch, Cathérine;

The Causal Effect of House Prices on Mortgage Demand and Mortgage Supply

Abstract

We identify the causal effect of house prices on mortgage demand and supply in Switzerland by exploiting exogenous shocks to immigration and thereby to house prices. Detailed micro data allow us to observe multiple offers for each mortgage request. We find a 1% increase in house prices to raise the requested mortgage amount by 0.52%. Due to positive feedback effects, the entire partial correlation is 0.78%. While we find higher house prices to increase mortgage demand, they induce banks to make fewer offers and charge higher rates, especially later in the boom and especially for highly leveraged households.

Country
Switzerland
Keywords

House prices, Immobilienwirtschaft, House Prices, R21, ECON Department of Economics, 10007 Department of Economics, Hypothek, D14, Mortgage Demand, Nachfrage, mortgage demand, instrumental variables, House prices, mortgage demand, mortgage supply, instrumental variables, ddc:330, Hypothekengeschäft, 330 Economics, mortgage supply, J61, Instrumental Variables, G21, Mortgage Supply, jel: jel:J61, jel: jel:G21, jel: jel:R21, jel: jel:D14

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Average
Average
Average
Green
bronze