Long-Term Debt and Short-Term Rates: Fixed Rate Mortgages and Monetary Transmission (with Rui C.Mano)
Forthcoming, Journal of Money, Credit and Banking
Media coverage: Central Banking ; Data on ARM Flows and Stocks
Spending Response to a Predictable Increase in Mortgage Repayments: Evidence from Expiring Interest-Only Loans (with Henrik Yde Andersen and Stine Ludvig Bech),
2024- The Review of Economics and Statistics, 106 (1), Pages 277-285
2021- Real Estate Economics, 49: 1238– 1266
2020- Journal of Housing Economics, 47: 101601
Beliefs and Risk Taking (with Kaspar Zimmermann)
2022-in Leveraged: The New Economics of Debt and Financial Fragility, Chicago University Press
Presented at: Private Debt Initiative (2019); Video
Using property-level data from the American Housing Survey (AHS), I document a novel channel through which rising mortgage rates fuel rent inflation. A regression-discontinuity design around the Federal Housing Finance (FHA) mortgage payment-to-income (MTI) threshold, combined with counterfactual MTI simulations show that the surge in mortgage rates between 2022 and 2023 pushed a substantial mass of prospective first-time buyers above common mortgage underwriting limits, reducing renter-to-owner transitions. Exploiting city-level variation in the shares of constrained first-time buyers combined with unit-level data on (hedonic) rent price changes, I show that this shift resulted in a reallocation of shelter demand into the rental sector, materially contributing to 2023 rent inflation. These effects were more pronounced in smaller units and among lower-income renters—highlighting an important distributional dimension of monetary tightening.
Presented at: 2026 AEA meetings, Philadelphia; IMF 8th Annual Macro-Financial Research Conference
Dormant papers
Real Effects of Relaxing Financial Constraints for Homeowners: Evidence from Danish Firms (with Julia Moertel), 2020