Many housing markets have experienced a dramatic rise in house prices and mortgage debt over recent decades that has outpaced average income growth. Increased wealth and increased collateral values have been cited as possible explanations. This column suggests that much of the increase in mortgage debt can be attributed to homebuyers being compelled to borrow more in order to buy adequately sized homes. As house prices continue to rise, understanding this 'housing consumption channel' is essential for policymakers, real estate professionals, and financial planners.

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19 October 2024

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VOX EU

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https://cepr.org/voxeu/columns/housing-consumption-channel-mortgage-demand

This Blog is published under the centre's Urban programme, Neighbourhoods programme.

This publication comes under the following theme: Housing