The housing sector is now (September 2007) at the root of three distinct but related problems: (1) a sharp decline in … house prices and the related fall in home building; (2) a subprime mortgage problem that has triggered a substantial … mortgage refinancing that could cause greater declines in consumer spending. Each of these could by itself be powerful enough …

The reallocation of mortgage debt to low-income or marginally qualified borrowers plays a central role in many … explanations of the early 2000s housing boom. We show that such a reallocation never occurred, as the distribution of mortgage debt … with respect to income changed little even as the aggregate stock of debt grew rapidly. Moreover, because mortgage debt …

, mortgage credit constraints and a price-to-price feedback loop affects house price volatility. Considering 247 Metropolitan …

lending constraints in the mortgage market. This view on the fundamental drivers of the boom is consistent with four empirical …, and the fall in mortgage rates. These facts are difficult to reconcile with the popular view that attributes the housing …