The Subprime Crisis and House Price Appreciation

Subprime Lending and House Price Volatility

This paper establishes a theoretical and empirical link between the use of aggressive mortgage lending instruments, such as interest only, negative amortization or subprime, mortgages and the underlying house price volatility. Such instruments, which come into existence through innovation or financial deregulation, allow more borrowing than otherwise would occur. Within the context of a theoret...

House Prices and Subprime Mortgage

The recent sharp increase in subprime mortgage delinquencies has captured the public spotlight and led analysts to search for the factors that are likely to have contributed to the problem.These factors commonly include the lack of income documentation, high loan-to-income ratios, the lowering of credit standards, and the resets on adjustable-rate loans, to name but a few. Although these factor...

House Price Indexes and the Global Financial Crisis

Why is this topic of house price indexes important? The Global Financial Crisis has several causes but a main cause was a housing bubble in the U.S. which led banks to make mortgage loans that were based on the assumption that house prices were not rising unusually quickly. If accurate regional house price indexes for the U.S. would have been widely available to the public, it is unlikely that ...

A Comparative Study of Condominium and Single Family House Price Appreciation in the Salt Lake Valley

This study examines whether the form of ownership affects the appreciation rate of housing units. The specific test conducted is whether condominiums and single family homes in the Salt Lake Valley have appreciated at the same rate over the past six and a half years. To test this hypothesis, a sample of 10,134 condominium and 48,913 house transactions was analyzed. The sales were grouped into e...

The Impact of House Price Appreciation on Portfolio Composition and Savings