Housing and Mortgage Markets with Climate-Change Risk
UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance
Topic: Housing and Mortgage Markets with Climate-Change Risk: Evidence from Wildfires in California
Speaker: Nancy Wallace, University of California, Berkeley
Abstract: This paper studies the effects of climate-driven events on the housing and mortgage markets. We merge property-level data on all California wildfires from 2000 to 2018, mortgage and property characteristics, household finances, and weather. We find a significant increase in mortgage delinquency and foreclosure after a fire in the devastated areas, but these effects decrease in the size of the fire, which we argue results from coordination externalities afforded by large fires and frictions in the insurance markets. These externalities and frictions lead to rebuilding in the devastated areas, with increases in home sizes, house prices, income and wealth. Our results suggest that recent large losses, combined with regulatory distortions, cast doubt on the ability of insurance companies and mortgage lenders to absorb climate-related losses and assess mortgage risk.
Moderator: Diego Puente Moncayo, University of Technology Sydney
Date: Wednesday, 18th August 2021
Time: 12-1 pm (Australian Eastern Standard Time)
Venue: This is on online Zoom webinar.
Seminar protocols:
- The webinar will run for 45 minutes, followed by a 15 minute Q&A session.
- There will be a moderator for each seminar event, who will facilitate communication and resolve any technical issues.
- Participants can use the chat facility or raise their had to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or unmute the participant so they can ask the question directly to the presenter.
Co-ordinator: Harry Scheule
Enquiries: Duncan Ford