Real Estate Loan Delinquency, Property Prices and Alternative Income Opportunities

Document Type

Article

Publication Date

12-2005

Abstract

Evidence is shown, using US real estate default data from 1987–2004, that high default rates on mortgages are associated with prior period housing prices, rental income, inflation-adjusted household median income and interest rate fluctuations. This paper investigates the proposition: that the percentage of real estate defaults is a function of alternative income opportunities.

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