BEGIN:VCALENDAR
PRODID:-//eluceo/ical//2.0/EN
VERSION:2.0
CALSCALE:GREGORIAN
BEGIN:VEVENT
UID:bdcffdb7dfd531acc4f356405d98035e
DTSTAMP:20240505T130715Z
SUMMARY:Theresa Kuchler\, PhD\, New York University Stern School of Busines
 s
DESCRIPTION: \n\nWe study the effects of homebuyers’ beliefs about future
  house price\nchanges on their mortgage leverage choice. We show that\, fr
 om a\ntheoretical perspective\, the relationship between homebuyers’\nbe
 liefs and their leverage choice is ambiguous\, and depends on the\nmagnitu
 de of a “collateral adjustment friction” that reduces\nhomebuyers’ w
 illingness to adjust their house size in response to\nbeliefs about house 
 price changes. When households primarily maximize\nthe levered return of t
 heir property investment and the collateral\nadjustment friction is small\
 , more optimistic homebuyers take on more\nleverage to purchase larger hou
 ses and profit from the greater\nperceived price appreciation. On the othe
 r hand\, when considerations\nsuch as family size pin down the desired pro
 perty size and the\ncollateral adjustment friction is large\, more optimis
 tic homebuyers\ntake on less leverage to finance that property of fixed si
 ze\, since\nthey perceive a higher marginal cost of borrowing. To determin
 e which\nscenario better describes the data\, we empirically investigate t
 he\ncross-sectional relationship between beliefs and leverage in the U.S.\
 nhousing market. Our data combine mortgage financing information and a\nho
 using market expectations survey with anonymized social network data\nfrom
  Facebook. The survey documents that an individual’s belief\ndistributio
 n about future house price changes is affected by the\nrecent house price 
 experiences of her geographically distant friends\,\nallowing us to exploi
 t these experiences as quasi-orthogonal shifters\nof individuals’ house 
 price beliefs. We show that more optimistic\nhomebuyers choose lower lever
 age\, consistent with a sizable collateral\nadjustment friction. As predic
 ted by the model\, the magnitude of the\ncross-sectional relationship betw
 een beliefs and leverage choice is\nstronger during periods when household
 s expect prices to fall on\naverage.\n\nTheresa Kuchler is an assistant pr
 ofessor of finance at New York\nUniversity’s Stern School of Business. K
 uchler earned a Ph.D. in\nEconomics from Stanford University. Prior to att
 ending Stanford\, she\nreceived a diploma in Business Economics from the U
 niversity of\nMannheim and spent a year as a Fulbright visiting student in
  the\nEconomics department at UC Berkeley. Read more about Kuchler\nhttp:/
 /pages.stern.nyu.edu/~tkuchler/index.html\n 
DTSTART:20171006T150000Z
DTEND:20171006T163000Z
LOCATION:Gerri C. LeBow Hall\, 3220 Market Street\, TBD\, Philadelphia\, PA
  19104
END:VEVENT
END:VCALENDAR