Replication data for: Interest Rates and Equity Extraction during the Housing Boom

Principal Investigator(s):  View help for Principal Investigator(s) Neil Bhutta; Benjamin J. Keys

Version:  View help for Version V1

Name File Type Size Last Modified
  BhuttaKeys_data 10/26/2021 01:08:PM
LICENSE.txt text/plain 14.6 KB 12/06/2019 12:03:PM

Project Citation: 

Bhutta, Neil, and Keys, Benjamin J. Replication data for: Interest Rates and Equity Extraction during the Housing Boom. Nashville, TN: American Economic Association [publisher], 2016. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-06. https://doi.org/10.3886/E116153V1

Project Description

Summary:  View help for Summary Credit record panel data from 1999-2010 indicates that the likelihood of home equity extraction (borrowing, on average, about $40,000 against one's home) peaked in 2003 when mortgage rates reached historic lows. We estimate a 27 percent rise in extraction in response to a 100 basis point rate decline, and that house price growth amplifies this relationship. Differential responses to interest rates and home price appreciation by borrower age and credit score provide new evidence of financial frictions. Finally, equity extractions are associated with higher default risk, consistent with the use of borrowed funds for consumption or illiquid investment.

Scope of Project

JEL Classification:  View help for JEL Classification
      D14 Household Saving; Personal Finance
      E43 Interest Rates: Determination, Term Structure, and Effects
      E52 Monetary Policy
      G12 Asset Pricing; Trading Volume; Bond Interest Rates
      R31 Housing Supply and Markets
Time Period(s):  View help for Time Period(s) 1999 – 2010


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V1 [2019-12-06]

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