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The Effect of Mortgage Origination Fees on the Housing Price Dynamics

Author

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  • Ashot Tsharakyan

Abstract

This paper explores the link between mortgage origination fees and housing prices. It is argued that sharp decline in mortgage origination fees in US since the late 1980s was caused by mortgage market deregulation and mortgage innovation. Based on this reasoning the sources of exogenous variation in mortgage fees are identified, and the effect of mortgage fees on housing prices is quantified. The results indicate that decline in mortgage fees had robust statistically significant positive effect on housing prices. The lagged effect of mortgage fees on housing prices is also present.

Suggested Citation

  • Ashot Tsharakyan, 2008. "The Effect of Mortgage Origination Fees on the Housing Price Dynamics," CERGE-EI Working Papers wp357, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp357
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    File URL: http://www.cerge-ei.cz/pdf/wp/Wp357.pdf
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    More about this item

    Keywords

    Mortgage origination fees; housing price; branching restrictions ; mortgage market deregulation.;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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