Association for Public Policy Analysis & Management

In this paper, we examine the relationship between housing price growth, housing quality, income, and buyer credit access during the housing boom and bust at the neighborhood-level in Massachusetts. Specifically, we are examining whether the gap between local buyer and seller incomes, housing prices and quality, and mortgage characteristics was greater during the housing boom period than other housing market periods. Other recent studies offer conflicting evidence on whether the composition of home buyers across communities changed during the housing boom, and we find evidence that higher income buyers were purchasing homes, and potentially driving up housing values, in lower-income neighborhoods.  For this study, we are using American Housing Survey (AHS) data, along with a dataset we created of HMDA records merged with additional records on home purchases in Massachusetts. We hope to better understand whether (and where) there was a fundamental shift in neighborhood homeowner or borrower characteristics during the housing boom and bust periods with our unique data.