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Does Credit Quality Matter for Homeownership?

Irina Barakova, Raphael Bostic, Paul Calem, Susan Wachter
While there has been considerable research empirically quantifying and simulating the role of borrowing constraints on homeownership rates, the primary focus of this work has been on measuring the relative importance of income and wealth constraints with respect to ownership outcomes. An important gap in the literature – the role of credit quality – has largely gone uninvestigated. Also missing from the literature is an assessment of recent trends; that is, of the degree to which the effects of borrowing constraints on homeownership may have changed over the past decade.