Skip to main content

Interest rate volatility and home mortgage loans

Buy Article:

$53.17 plus tax (Refund Policy)

Abstract:

The US economy has experienced substantial fluctuations in real and nominal interest rates since the 1970s. This article investigates empirically the relationship between home mortgage loans and volatility in mortgage rates for the period 1971:02 to 2003:03. Contrary to common wisdom, we find a positive relationship between mortgage rate volatility and home mortgage loans. Further investigation indicates that this is due to volatility in the bond market. In times of high interest volatility, households disinvest in government securities and invest in real assets, which yields a positive relationship between mortgage rate volatility and home mortgage loans.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840600949538

Affiliations: Department of Economics, Louisiana State University, Baton Rouge, LA 70803-6306, USA

Publication date: September 1, 2008

More about this publication?
routledg/raef/2008/00000040/00000018/art00008
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more