Toggle Mobile Menu
Princeton Community

Ziqiao Zhang On The Rise of Mortgage Among the Old and the US Housing Market

Ziqiao Zhang
February 25, 2025
12:15 pm - 1:15 pm
Student Research Workshop

More from this series
Room 108

This paper examines the role of older Americans in the U.S. housing market. First, using data from the Census and the Survey of Consumer Finances (SCF), I document a long-term increase in mortgage leverage among older households. Second, I argue that the combination of declining interest rates and looser mortgage origination standards has relaxed the payment-to-income (PTI) constraint, allowing households to take on mortgage debt later in life despite having limited income. I provide empirical support for this mechanism using Home Mortgage Disclosure Act (HMDA) data and regional variation in exposure to the adoption of automated underwriting in the 1990s. Finally, I develop a numerical lifecycle model to analyze the implications for aggregate house prices and intergenerational wealth distribution.