Replication data for: The Interest Rate Elasticity of Mortgage Demand: Evidence from Bunching at the Conforming Loan Limit

Principal Investigator(s): View help for Principal Investigator(s) Anthony A. DeFusco; Andrew Paciorek

Name	File Type	Size	Last Modified
POL2014-0108_data			10/26/2021 02:51:PM
LICENSE.txt	text/plain	14.6 KB	12/07/2019 11:12:AM

Project Citation:

DeFusco, Anthony A., and Paciorek, Andrew. Replication data for: The Interest Rate Elasticity of Mortgage Demand: Evidence from Bunching at the Conforming Loan Limit. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-12-07. https://doi.org/10.3886/E116504V1

Project Description

Summary: This paper provides novel estimates of the interest rate elasticity of mortgage demand by measuring the degree of bunching in response to a discrete jump in interest rates at the conforming loan limit--the maximum loan size eligible for purchase by Fannie Mae and Freddie Mac. The estimates indicate that a 1 percentage point increase in the rate on a 30-year fixed-rate mortgage reduces first mortgage demand by between 2 and 3 percent. One-third of this response is driven by borrowers who take out second mortgages, which implies that total mortgage debt only declines by 1.5 to 2 percent.

Scope of Project

Subject Terms: Elasticity; Housing; Bunching; Mortgages

JEL Classification:
      D14 Household Saving; Personal Finance
      G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
      R21 Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
      R31 Housing Supply and Markets

Geographic Coverage: United States

Methodology

Unit(s) of Observation: Mortgage Loan,

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Published Versions

V1 [2019-12-07]

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