The Interest Rate Elasticity of Mortgage Demand: Evidence from Bunching at the Conforming Loan Limit

• 成果类型: Article
• 署名作者: DeFusco, Anthony A.; Paciorek, Andrew
• 署名单位: Northwestern University; Federal Reserve System - USA
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20140108
• 发表日期: 2017
• 页码: 210-240
• 关键词: tax; credit; responses; subsidies; Notches; uncover; COSTS; debt

摘要

This paper provides novel estimates of the interest rate elasticity of mortgage demand by measuring the degree of bunching in response to a discrete jump in interest rates at the conforming loan limit-the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac. The estimates indicate that a 1 percentage point increase in the rate on a 30-year fixed-rate mortgage reduces first mortgage demand by between 2 and 3 percent. One-third of this response is driven by borrowers who take out second mortgages, which implies that total mortgage debt only declines by 1.5 to 2 percent.