Co-borrowers disappearing from US mortgages, leading to higher defaults and lower house prices.
The number of people applying for mortgages with a co-borrower has decreased in the US since the 1990s. Having a co-borrower reduces the chance of defaulting on a mortgage by more than half. Regions with fewer co-borrowers before the financial crisis had higher mortgage default rates. Areas with fewer co-borrowers also saw slower growth in house prices, refinancing, and mortgage credit.