• Corpus ID: 43156512

Do Financial Constraints Cool a Housing Boom

  title={Do Financial Constraints Cool a Housing Boom},
  author={Lu Han and Chandler Lutz and Benjamin M. Sand and Derek G. Stacey},
We study the housing market implications of financial constraints by exploiting a regulatory change that withholds access to mortgage insurance when homes sell for $1 million or more, effectively increasing the downpayment requirement at the threshold. We motivate our listing and sales price analysis by advancing a model of competing auctions with constrained bidders. Using Toronto data, we find sharp excess bunching for homes listed but not sold at $1M, along with changes to bidding intensity… 
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