Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/60965 
Year of Publication: 
2011
Series/Report no.: 
Staff Report No. 514
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We explore a mostly undocumented but important dimension of the housing market crisis: the role played by real estate investors. Using unique credit-report data, we document large increases in the share of purchases, and subsequently delinquencies, by real estate investors. In states that experienced the largest housing booms and busts, at the peak of the market almost half of purchase mortgage originations were associated with investors. In part by apparently misreporting their intentions to occupy the property, investors took on more leverage, contributing to higher rates of default. Our findings have important implications for policies designed to address the consequences and recurrence of housing market bubbles.
Subjects: 
mortgages
leverage
JEL: 
G21
D18
R31
Document Type: 
Working Paper

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