There is widespread disagreement about the role of housing wealth in explaining consumption. This paper exploits liquid … expectations, inter alia. The paper confirms a collateral interpretation of housing wealth on consumption as opposed to a life …

finds strong empirical evidence for a positive effect. Life-cycle theory also suggests that housing wealth effects on … enhance the negative effect on consumption of higher house prices because saving for a housing deposit needs to be higher. Our …

-Modigliani style consumption function. The models incorporate income growth expectations, income uncertainty, housing collateral and …-to-income ratio shifted up in the UK and US as mortgage down-payment constraints eased and as the collateral role of housing wealth … was enhanced by financial innovations, such as home equity loans. The estimated housing collateral effect is roughly …

heterogeneous, infinitely lived households and competitive housing and mortgage markets. Households have the option to default on … equilibrium mortgage origination and increases aggregate welfare, but has little effect on foreclosure rates and housing …

by owner-occupied housing whereas unsecured debt can be discharged according to bankruptcy regulations. We show that the …