Almaas, Synne
[Verfasser:in]
;
Bystrøm, Line
[Sonstige Person, Familie und Körperschaft];
Carlsen, Fredrik
[Sonstige Person, Familie und Körperschaft];
Su, Xunhua
[Sonstige Person, Familie und Körperschaft]
Home Equity-Based Refinancing and Household Financial Difficulties
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 20, 2015 erstellt
Beschreibung:
Housing prices in Norway and the Norwegian household-debt-to-disposable-income ratio have reached unprecedentedly high levels in recent years, raising debates about whether there is a serious housing bubble. Contributing to the debates, we study home equity-based refinancing in Norway and have two main findings. First, along with soaring housing prices, homeowners significantly withdraw their home equity. This cash-out accounts for at least one-third of outstanding household mortgages and hence substantially contributed to the high debt-to-income ratio. Second, households with large cash-out-to-income ratios are more likely to have financial difficulties. As cash-out refinancing is blamed to be one of the key drivers of the subprime crisis in the United States, our findings call for more attention to home equity-based refinancing in the Norwegian housing market