Петър Иванов
Abstract: This article is a brief overview of major studies worldwide that examine the influence of credit conditions
and banks’ activity over housing prices. Theories of different authors over the relationship between the mortgage and
housing markets are presented with focus on the direction and extend to which prices of dwellings are bound to move.
Assumptions are tested through models with real data for a separate country or a group of similar countries over a
historic period of time. Findings about the major credit determinants of housing prices are presented together with a
description of the influence they have on the housing market and the economy as a whole. The causality between the
two markets is also examined in both its straight and reverse direction.
Key words: housing prices, mortgage loans, bank lending, financial crisis, interest rates, debt ratio, LTV, noncooperative
bargaining, cyclical nature
