Does Credit Quality Matter for Homeownership?

Abstract

While there has been considerable research empirically quantifying and simulating the roleof borrowing constraints on homeownership rates, the primary focus of this work has been onmeasuring the relative importance of income and wealth constraints with respect to ownershipoutcomes. An important gap in the literature – the role of credit quality – has largely goneuninvestigated. Also missing from the literature is an assessment of recent trends; that is, of thedegree to which the effects of borrowing constraints on homeownership may have changed overthe past decade.