Working Paper: Securitization and House Price Growth
Working Paper - June 2021 - No. 181
From 2000-2006 US house prices and mortgage credit grew while the relative cost of mortgage credit fell particularly for privately securitized mortgages suggesting a credit supply expansion. This paper explores two (credit supply) shocks: an increased inflow of global savings into the US, and innovations in the securitization of mortgage credit. Only innovation in securitization matches mortgage market dynamics.