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What Happens to Banks When House Prices Fall? U.S. Regional Busts of the 1980s and 1990s [electronic resource]

David C. Wheelock
Format
Computer Resource; Online
Published
Ann Arbor, Mich. Inter-university Consortium for Political and Social Research [distributor] 2006
Edition
2006-11-29
Language
English
Series
ICPSR
ICPSR (Series)
Access Restriction
AVAILABLE. This study is freely available to the general public.
Abstract
The recent rapid appreciation of house prices in many U.S. markets has prompted concern over the possible effects of a sharp decline in prices, especially for commercial banks and other real estate lenders. This article examines regional real estate booms and busts in the 1980s and 1990s: Only about half of state house price booms were followed by a severe decline in prices, but large house price declines experienced high loan default rates and, thus, low profit and high failure rates. Although U.S. banks may have become more exposed to residential real estate recently, they appear less vulnerable to a decline in house prices than banks in states with large price declines in the earlier period.
Series Statement
ICPSR 1337
ICPSR (Series) 1337
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Also available as downloadable files.
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