TY  - JOUR
AU  - Lamont,Owen
AU  - Stein,Jeremy C.
TI  - Leverage and House-Price Dynamics in U.S. Cities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5961
PY  - 1997
Y2  - March 1997
UR  - http://www.nber.org/papers/w5961
L1  - http://www.nber.org/papers/w5961.pdf
N1  - Author contact info:
Owen Lamont
Department of Economics
Harvard University
Cambridge MA 02138
E-Mail: owen.lamont@yale.edu

Jeremy C. Stein
Department of Economics
Harvard University
Littauer 209
Cambridge, MA  02138
Tel: 617/496-6455
Fax: 617/496-7352
E-Mail: jeremy_stein@harvard.edu
AB  - In this paper, we use city-level data to analyze the relationship between homeowner borrowing patterns and house-price dynamics. Our principal finding is that in cities where homeowners are more leveraged--i.e., have higher loan-to-value ratios--house prices react more sensitively to city-specific shocks, such as changes in per-capita income.  This finding is consistent with recent theories which emphasize the role of collateralized borrowing in shaping the behavior of asset prices.
ER  -