The Sensitivity of Housing Demand to Financing Conditions: Evidence from a Survey

Measuring the sensitivity of housing demand to mortgage rates and available leverage is challenging because there generally no exogenous variation in these variables. This paper circumvents this issue by designing a strategic survey which respondents report their willingness pay (WTP) for home under different financing scenarios. Relaxation down payment constraints or an increase nonhousing wealth has large effects on WTP, especially poorer more credit-constrained households. However, changing rate only moderate WTP. These findings have implications theoretical models house price determination policy. (JEL G21, G51, R21, R38)