2024-03-28T12:03:35
113081
Thu Mar 28 12:03:36 EDT 2024
Replication data for: Regional Redistribution through the US Mortgage Market
Erik Hurst
Benjamin J. Keys
Amit Seru
Joseph Vavra
113081
https://doi.org/10.3886/E113081V1
Regional shocks are an important feature of the US economy. Households' ability to self-insure against these shocks depends on how they affect local interest rates. In the United States, most borrowing occurs through the mortgage market and is influenced by the presence of government-sponsored enterprises (GSE). We establish that despite large regional variation in predictable default risk, GSE mortgage rates for otherwise identical loans do not vary spatially. In contrast, the private market does set interest rates which vary with local risk. We use a spatial model of collateralized borrowing to show that the national interest rate policy substantially affects welfare by redistributing resources across regions.
E32 Business Fluctuations; Cycles
E43 Interest Rates: Determination, Term Structure, and Effects
G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
G28 Financial Institutions and Services: Government Policy and Regulation
L32 Public Enterprises; Public-Private Enterprises
R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
R31 Housing Supply and Markets