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–Nonrecourse Mortgage and Housing Price Boom, Bust, and Rebound
Author(s) -
Bao Te,
Ding Li
Publication year - 2015
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.12116
Subject(s) - bust , economics , boom , volatility (finance) , monetary economics , metropolitan area , price level , keynesian economics , macroeconomics , financial economics , medicine , pathology , environmental engineering , engineering
This paper investigates the impact of –nonrecourse vs. recourse mortgages on housing price dynamics in major U.S. metropolitan statistical areas for the period from 2000 to 2013. We find evidence that –nonrecourse states experience faster price growth during the boom period (2000–2006), a sharper price drop during the bust period (2006–2009) and faster price recovery in the rebound period after a crisis (2009–2013). Moreover, the volatility of housing prices is higher in nonrecourse states than in recourse states, particularly during the rebound period.