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Author: Calem, Paul S.
Resulting in 2 citations.
1. Barakova, Irina
Calem, Paul S.
Wachter, Susan M.
Borrowing Constraints during the Housing Bubble
Journal of Housing Economics 24 (June 2014): 4-20.
Cohort(s): NLSY79
Publisher: Elsevier
Keyword(s): Credit/Credit Constraint; Debt/Borrowing; Home Ownership; Income; Wealth

The impact of borrowing constraints on homeownership has been well established in the literature. Wealth is most likely to restrict homeownership followed by credit and income. Using recent movers from the 1979 National Longitudinal Survey of Youth and borrowing constraint definitions commonly used in the literature, we examine the impact of these constraints on the probability of homeownership during the housing market boom between 2003 and 2007. We show that whereas the pool of financially constrained households expanded, the marginal impact of borrowing constraints associated with income and credit quality declined during this period. The constraint associated with wealth, however, continued to have a negative impact on homeownership status, all else equal. The fact that lending standards became less strict is accepted; however the impact of this on homeownership has not been previously studied. Here we find that less restrictive underwriting does appear to have reduced the impact of income and credit quality on homeownership but the impact of the wealth constraint persists.
Bibliography Citation
Barakova, Irina, Paul S. Calem and Susan M. Wachter. "Borrowing Constraints during the Housing Bubble." Journal of Housing Economics 24 (June 2014): 4-20.
2. Calem, Paul S.
Firestone, Simon
Wachter, Susan M.
Credit Impairment and Housing Tenure Status
Journal of Housing Economics 19 (September 2010): 219-232
Cohort(s): NLSY79
Publisher: Academic Press, Inc.
Keyword(s): Credit/Credit Constraint; Debt/Borrowing; Home Ownership

We revisit the relationship between financing constraints and homeownership rates using the 2004 wave of the 1979 National Longitudinal Survey of Youth. The survey respondents are a nationally representative sample of Americans 39-47 years of age as of this wave. As most of the sample had been in their current residence prior to 2004, this study reflects housing tenure status decisions made prior to the recent credit expansion and subsequent crisis. Past research has emphasized wealth constraints, and income constraints as limiting homeownership. The estimation results here point to primary roles for credit impairment and lack of credit history. We also find that excluding controls for the endogeneity of wealth and income may mask the impact of credit factors.
Bibliography Citation
Calem, Paul S., Simon Firestone and Susan M. Wachter. "Credit Impairment and Housing Tenure Status." Journal of Housing Economics 19 (September 2010): 219-232.