TY  - JOUR
AU  - Justiniano, Alejandro
AU  - Primiceri, Giorgio E
AU  - Tambalotti, Andrea
TI  - Credit Supply and the Housing Boom
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 20874
PY  - 2015
Y2  - January 2015
DO  - 10.3386/w20874
UR  - http://www.nber.org/papers/w20874
L1  - http://www.nber.org/papers/w20874.pdf
N1  - Author contact info:
Alejandro Justiniano
E-Mail: N/A user is deceased

Giorgio Primiceri
Department of Economics
Northwestern University
2211 Campus Drive
Evanston, IL 60208
Tel: 847/491-5395
Fax: 847/491-7001
E-Mail: g-primiceri@northwestern.edu

Andrea Tambalotti
Federal Reserve Bank of New York 
Research and Statistics Group 
33 Liberty Street, 4th Floor 
New York, NY 10045
Tel: (212) 720-5657
E-Mail: a.tambalotti@gmail.com
AB  - The housing boom that preceded the Great Recession was due to an increase in credit supply driven by looser lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical observations: the unprecedented rise in home prices and household debt, the stability of debt relative to house values, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing boom to looser borrowing constraints associated with lower collateral requirements. In fact, a slackening of collateral constraints at the peak of the lending cycle triggers a fall in home prices in our framework, providing a novel perspective on the possible origins of the bust.
ER  -