The Age Gap in Mortgage Access
Management Science · Wed
Abstract
This paper uses a large data set of single family home mortgage applications to study the relationship between borrower age and application outcomes. Conditional on a rich set of observable characteristics, age is positively correlated with rejection probability and coupon rate. The results hold for young borrowers, implying that age, not just old age, is an important determinant of mortgage application outcomes. Empirical tests that exploit COVID-19 suggest that the rejection probability results are partly driven by age-related mortality risk. Survey data suggests that the pricing results are partly driven by insufficient shopping. This paper was accepted by Tomasz Piskorski, finance. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.08264 .
Keywords
aging, mortgage access, housing, inequality
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