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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research

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The income elasticity of mortgage loan demand, Financial Markets, Institutions and Instruments (2019). Delis, Manthos D.; Hasan, Iftekhar; Tsoumas, Chris


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Delis, Manthos D.; Hasan, Iftekhar; Tsoumas, Chris 
Number of authors 3 
Status Online First
Year of publication 2019 
Date 27.02.2019 
Name of article The income elasticity of mortgage loan demand 
Name of journal Financial Markets, Institutions and Instruments
Abstract One explanation for the emergence of the housing market bubble and the subprime crisis is that increases in individuals’ income led to higher increases in the amount of mortgage loans demanded, especially for the middle class. This hypothesis translates to an increase in the income elasticity of mortgage loan demand before 2007. Using applicant‐level data, we test this hypothesis and find that the income elasticity of mortgage loan demand in fact declines in the years before 2007, especially for the mid‐ and lower‐middle income groups. Our finding implies that increases in house prices were not matched by increases in loan applicants’ income.
Free text descriptor in Finnish tulonjako; tulot; asuntolainat; asunnot; hinnat; luotot; kysyntä; tulojousto 
Free text descriptor in English distribution of income, income elasticity, mortgage loan demand, subprime crisis 
JEL-codes G21, G01, D12, E44, R21 
ISSN / e-ISSN 0963-8008 
auki Internet addresses
Additional information First published: 27 February 2019|