Banking deregulation and homeownership

This paper studies how banking deregulation affects homeownership. Exploiting the U.S. intra-state and interstate banking deregulations from 1980s to early 1990s, we find that an exogenous expansion of bank branches increases renters likelihood of becoming homeowners as much as 8.7 percentage points. In addition, the impact is larger on households with low income and high debt-to-income ratios. Our estimated impacts are larger than those estimated from state-level data, suggesting that the heterogeneous effects among households are important towards home ownership. Our findings are robust to potential sample selection bias and functional misspecifications.