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Home price growth and minority access to mortgage credit

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  • Tahsin, Salman

Abstract

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.

Suggested Citation

  • Tahsin, Salman, 2022. "Home price growth and minority access to mortgage credit," Journal of Economics and Business, Elsevier, vol. 120(C).
    • Handle: RePEc:eee:jebusi:v:120:y:2022:i:c:s0148619522000121
    DOI: 10.1016/j.jeconbus.2022.106056
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    More about this item

    Keywords

    Home price growth; Residential lending standards; Minority borrowers; Subprime loans; Mortgage supply;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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