NDLI: Structural change in the mortgage market and the propensity to refinance

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Structural change in the mortgage market and the propensity to refinance

Content Provider	Library of Congress - Books/Printed Material
Author	Peach, Richard Wilson Bennett, Paul (Paul Bruce)
Spatial Coverage	United States
Temporal Coverage	1998
Abstract	"We hypothesize that the intrinsic benefit required to trigger a refinancing has become smaller due to a combination of technological, regulatory, and structural changes that have made mortgage origination more competitive and more efficient. To test this hypothesis, we estimate an empirical hazard model of loan survival for two subperiods, using a database that allows us to carefully control for homeowners' credit ratings, equity, loan size, and measurable transaction costs. Our findings strongly confirm that credit ratings and home equity have significant effects on the refinancing probability. In addition, we provide evidence that homeowners postpone refinancing in the face of increased interest rate volatility, consistent with option value theory. Finally, our results clearly support the hypothesis that structural change in the mortgage market has increased homeowners' propensity to refinance"--Federal Reserve Bank of New York web site.
Language	English
Publisher	Federal Reserve Bank of New York,
Publisher Place	New York, N.Y.
Part of Series	Catalog
Requires	HTML5 supported browser
Access Restriction	Open
Subject Keyword	Econometric Models Finance Housing Mortgage Loans Refinancing United States
Subject Domain (in LCSH)	Mortgage loans--United States--Refinancing--Econometric models
Subject Domain (in LCSH)	Housing--United States--Finance--Econometric models
Subject Domain (in LCC)	HB1
Content Type	Text
Resource Type	Book

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