The impact of housing markets on consumer debt: Credit report evidence from 1999 to 2012

Meta Brown, Sarah Stein, Basit Zafar

Research output: Contribution to journalArticle

12 Scopus citations

Abstract

We estimate the response of consumer debt portfolios to pronounced housing market swings from 1999 to 2012 using Equifax-sourced credit report data and a variety of identification approaches. We find: (i) the extraordinary climb in home equity debt from 2002 to 2006 is an expression of a stable, longer-term relationship between house price growth and home equity borrowing; (ii) all preboom homeowners, and older and prime postboom homeowners, demonstrate near dollar-for-dollar substitution between (expensive) credit card and (cheap) home equity debt in response to home equity changes; and (iii) little evidence of substitution between home equity and student loan debt.

Original languageEnglish (US)
Pages (from-to)175-213
Number of pages39
JournalJournal of Money, Credit and Banking
Volume47
Issue numberS1
DOIs
StatePublished - Mar 1 2015
Externally publishedYes

Keywords

  • Consumer finance
  • Housing
  • Student loans

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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