How Much Are Car Purchases Driven by Home Equity Withdrawal?

Autor:	Karen M. Pence, Daniel J. Vine, Brett McCully
Rok vydání:	2019
Předmět:	Home equity Economics and Econometrics 05 social sciences Consumer spending Loan market Equity (finance) Cash out refinancing Monetary economics Boom Article Loan Accounting 0502 economics and business Economics 050207 economics Finance 050205 econometrics
Zdroj:	J Money Credit Bank
ISSN:	1538-4616 0022-2879
DOI:	10.1111/jmcb.12595
Popis:	Previous research indicates that changes in housing wealth affect consumer spending on cars. We find that home equity extraction plays only a small role in this relationship. Consumers rarely use funds from equity extraction to purchase a car directly, even during the mid-2000s housing boom; this finding holds across three nationally representative household surveys. We find in credit bureau data that equity extraction does lead to a statistically significant increase in auto loan originations, consistent with equity extraction easing borrowing constraints in the auto loan market. This channel, though, accounts for only a tiny share of overall car purchases.
Databáze:	OpenAIRE
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