Liquidity constraints and housing prices: Theory and evidence from the VA mortgage program

• 成果类型: Article
• 署名作者: Vigdor, Jacob L.
• 署名单位: Duke University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2005.09.010
• 发表日期: 2006
• 页码: 1579-1600
• 关键词: home ownership; borrowing; mortgage; veterans

摘要

This paper employs a simple intertemporal model to show that presence of liquidity constraints can depress the price of a durable good below its net present rental value, regardless of the overall supply elasticity. The existence of price effects implies that the relaxation of liquidity constraints is not Pareto improving, and may in fact be regressive. Historical evidence, which exploits the fact that a clearly identifiable group, war veterans, enjoyed the most favored access to mortgage credit after World War 11, supports the model. The results suggest that more recent mortgage market innovations have served primarily to increase prices rather than home ownership rates, and that such innovations have the potential to exacerbate socioeconomic disparities in ownership rates. (c) 2005 Elsevier B.V. All rights reserved.