Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60965
Authors: 
Haughwout, Andrew
Lee, Donghoon
Tracy, Joseph
van der Klaauw, Wilbert
Year of Publication: 
2011
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 514
Abstract: 
We explore a mostly undocumented but important dimension of the housing market crisis: the role played by real estate investors. Using unique credit-report data, we document large increases in the share of purchases, and subsequently delinquencies, by real estate investors. In states that experienced the largest housing booms and busts, at the peak of the market almost half of purchase mortgage originations were associated with investors. In part by apparently misreporting their intentions to occupy the property, investors took on more leverage, contributing to higher rates of default. Our findings have important implications for policies designed to address the consequences and recurrence of housing market bubbles.
Subjects: 
mortgages
leverage
JEL: 
G21
D18
R31
Document Type: 
Working Paper

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