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Us Housing Market During Covid 19 Aggregate And Distributional Evidence
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Book Synopsis US Housing Market during COVID-19: Aggregate and Distributional Evidence by : Mr.Yunhui Zhao
Download or read book US Housing Market during COVID-19: Aggregate and Distributional Evidence written by Mr.Yunhui Zhao and published by INTERNATIONAL MONETARY FUND. This book was released on 2020-09-25 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using zip code-level data and nonparametric estimation, I present eight stylized facts on the US housing market in the COVID-19 era. Some aggregate results are: (1) growth rate of median housing price during the four months (April-August 2020) since the Federal Reserve’s unprecedented monetary easing has accelerated faster than any four-month period in the lead-up to the 2007-09 global financial crisis; (2) the increase in housing demand in response to lower mortgage interest rates displays a structural break since March 2020 (housing demand has increased by much more than before). These results indicate either the existence of “fear of missing out” or COVID-induced fundamental changes in household behavior. In terms of distributional evidence, I find that the increase of housing demand seems more pronounced among the two ends of the income distribution, possibly reflecting relaxed liquidity constraints at the lower end and speculative demand at the higher end. I also find that the developments in housing price, demand, and supply since April 2020 are similar across urban, suburban, and rural areas. The paper highlights some potential unintended consequences of COVID-fighting policies and calls for further studies of the driving forces of the empirical findings.
Book Synopsis The Pricing-Out Phenomenon in the U.S. Housing Market by : Francesco Beraldi
Download or read book The Pricing-Out Phenomenon in the U.S. Housing Market written by Francesco Beraldi and published by International Monetary Fund. This book was released on 2023-01-06 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: The COVID-19 pandemic further extended the multi-year housing boom in advanced economies and emerging markets alike against massive monetary easing during the pandemic. In this paper, we analyze the pricing-out phenomenon in the U.S. residential housing market due to higher house prices associated with monetary easing. We first set up a stylized general equilibrium model and show that although monetary easing decreases the mortgage payment burden, it would raise house prices, lower housing affordability for first-time homebuyers, and increase housing wealth inequality between first-time and repeat homebuyers. We then use the U.S. household-level data to quantify the effect of the house price change on housing affordability relative to that of the interest rate change. We find evidence of the pricing-out effect for all homebuyers; moreover, we find that the pricing-out effect is stronger for first-time homebuyers than for repeat homebuyers. The paper highlights the importance of accounting for general equilibrium effects and distributional implications of monetary policy while assessing housing affordability. It also calls for complementing monetary easing with well-targeted policy measures that can boost housing affordability, particularly for first-time and lower-income households. Such measures are also needed during aggressive monetary tightening, given that the fall in house prices may be insufficient or too slow to fully offset the immediate adverse impact of higher rates on housing affordability.
Book Synopsis The Housing Boom and Bust by : Thomas Sowell
Download or read book The Housing Boom and Bust written by Thomas Sowell and published by Basic Books (AZ). This book was released on 2009-05-12 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explains how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The "creative" financing of home mortgages and "creative" marketing of financial securities based on these mortgages to countries around the world, are part of the story of how a financial house of cards was built up--and then collapsed.
Book Synopsis The Impact of the COVID-19 Pandemic on the Demand for Density by : Sitian Liu
Download or read book The Impact of the COVID-19 Pandemic on the Demand for Density written by Sitian Liu and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Housing Boom and Headline Inflation: Insights from Machine Learning by : Yang Liu
Download or read book Housing Boom and Headline Inflation: Insights from Machine Learning written by Yang Liu and published by International Monetary Fund. This book was released on 2022-07-28 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation has been rising during the pandemic against supply chain disruptions and a multi-year boom in global owner-occupied house prices. We present some stylized facts pointing to house prices as a leading indicator of headline inflation in the U.S. and eight other major economies with fast-rising house prices. We then apply machine learning methods to forecast inflation in two housing components (rent and owner-occupied housing cost) of the headline inflation and draw tentative inferences about inflationary impact. Our results suggest that for most of these countries, the housing components could have a relatively large and sustained contribution to headline inflation, as inflation is just starting to reflect the higher house prices. Methodologically, for the vast majority of countries we analyze, machine-learning models outperform the VAR model, suggesting some potential value for incorporating such models into inflation forecasting.
Book Synopsis Regional Distributional Implications of COVID-19 on Housing Price Index and Investment Opportunities by : Arka Bandyopadhyay
Download or read book Regional Distributional Implications of COVID-19 on Housing Price Index and Investment Opportunities written by Arka Bandyopadhyay and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: I create a novel monthly county-level Housing Price Index (henceforth HPI) using Panel data from FHFA, which has quarterly data on HPI1 at CBSA2-level, originally based on Repeat-Sales methodology, a supply-side measure. The seller has a reservation price for selling a property because of the anchoring bias, rendering an upward pressure on the HPI. Since, Housing Stock supply is highly inelastic, hence, this HPI is not the equilibrium measure. I resort to the novel Facebook Social Connectivity Index (henceforth SCI) and determine the indicators for intra and inter-CBSA HPI changes, by interacting HPI with SCI weights which generate a self-replicating long-short investment strategy based on intra-CBSA deciles from the stretching of the spatial correlation intra-CBSA from the COVID-19 shock till the time this shock dwindles. These stark distributional implications for the county-level demand for housing from COVID-19 shock can be captured through the spatial correlation of SCI.
Download or read book U.S. Housing Market Conditions written by and published by . This book was released on 1994 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis House Prices and the Distribution of Wealth Around the Great Recession by : Richard Cóndor
Download or read book House Prices and the Distribution of Wealth Around the Great Recession written by Richard Cóndor and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper employs a calibrated model of the US economy to analyze the boom and bust in house prices as well as the shifts in the distribution of wealth during the years around the Great Recession. We replicate the dynamics of the housing market using shocks to aggregate income, the distribution of income, credit conditions, and expectations of future housing demand driven by irrational exuberance. We find that irrational exuberance was the primary driver behind the dynamics of house prices and that the relaxation and subsequent tightening of credit conditions are crucial to explain the behavior of mortgage debt, default rates, and housing holdings by households at the bottom of the wealth distribution. The boom in house prices led to a temporary decrease in wealth concentration, which was subsequently reversed during the bust.
Book Synopsis Price Expectations and the U.S. Housing Boom by : Pascal Towbin
Download or read book Price Expectations and the U.S. Housing Boom written by Pascal Towbin and published by International Monetary Fund. This book was released on 2015-07-30 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Between 1996 and 2006 the U.S. has experienced an unprecedented boom in house prices. As it has proven to be difficult to explain the large price increase by observable fundamentals, many observers have emphasized the role of speculation, i.e. expectations about future price developments. The argument is, however, often indirect: speculation is treated as a deviation from a benchmark. The present paper aims to identify house price expectation shocks directly. To that purpose, we estimate a VAR model for the U.S. and use sign restrictions to identify house price expectation, housing supply, housing demand, and mortgage rate shocks. House price expectation shocks are the most important driver of the boom and account for about 30 percent of the real house price increase. We also construct a model-based measure of exogenous changes in price expectations and show that this measure leads a survey-based measure of changes in house price expectations. Our main identification scheme leaves open whether expectation shifts are realistic or unrealistic. In extensions, we provide evidence that price expectation shifts during the boom were primarily unrealistic and were only marginally affected by realistic expectations about future fundamentals.
Book Synopsis House Prices, Income Distribution, and Monetary Policy in the United States by : Andrea Zehnder
Download or read book House Prices, Income Distribution, and Monetary Policy in the United States written by Andrea Zehnder and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates in how far monetary policy decisions by the Board of Governors of the Federal Reserve influence the housing market in the United States. On the basis of three different home value tiers, it is studied in how far the sensitivities to changes in the level of the interest rate vary between the segment and what this implies for the income and wealth distribution among households. By estimating linear and spatial panel data models, evidence is found for substantial differences in the elasticities of the three home value tiers. While the top tier proves quite resilient, the bottom home value is disproportionally strong affected by changes in the interest rate level. These results are robust across different model specifications. Transferring the findings to the context of income segments, it is concluded that the monetary policy regime of the recent two decades, through the transmission channel on home values, has increased the income and wealth disparity among home owners.
Book Synopsis Behavioral Changes and Policy Effects During Covid-19 by : André Kallåk Anundsen
Download or read book Behavioral Changes and Policy Effects During Covid-19 written by André Kallåk Anundsen and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Distributional Implications of the Impact of Fuel Price Increases on Inflation by : Mr. Kangni R Kpodar
Download or read book The Distributional Implications of the Impact of Fuel Price Increases on Inflation written by Mr. Kangni R Kpodar and published by International Monetary Fund. This book was released on 2021-11-12 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.
Book Synopsis Early Effects of the COVID-19 Pandemic on Housing Market in the United States by : Barış K. Yörük
Download or read book Early Effects of the COVID-19 Pandemic on Housing Market in the United States written by Barış K. Yörük and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I use daily data from fifty major cities to investigate the early effects of the COVID-19 pandemic on housing market in the United States. I find that starting from the second half of March, 2020, new home listings and pending home sales started to decrease. By mid-April, certain markets experienced more than 60% drop in new home listings and pending home sales relative to the same time period in the previous year. The collapse of the housing market is broad based, hitting all major cities, regardless of the intensity of virus spread or timing of the introduction of state level policies to combat the pandemic. The only exception is the closure of non-essential businesses at certain states, which is associated with up to a 9 percentage point decrease in new home listings.
Book Synopsis Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets by : Nina Biljanovska
Download or read book Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets written by Nina Biljanovska and published by International Monetary Fund. This book was released on 2023-12-22 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: The pattern of increasing suburban house prices relative to urban centers initiated during the pandemic continues to hold across the top 30 US metropolitan statistical areas (MSAs). In contrast, European countries such as Denmark, France, and the United Kingdom did not experience a similar shift in valuations. We posit and find supporting evidence that these divergent patterns partially due to differences in the characteristics of suburban areas, particularly in terms of household income and property sizes; with European suburbs being relatively poorer and characterized by smaller housing units. We show that, in the US, MSAs with suburban features more akin to those in European cities generally experienced little to no increase in suburban housing prices compared to their urban centers. Finally, our findings indicate that migration patterns of the high-income population might have partially influenced the urban-suburban revaluation in the US.
Book Synopsis The Distributional Effects of Monetary Policy by : Calvin He
Download or read book The Distributional Effects of Monetary Policy written by Calvin He and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Changes in the Distribution of Economic Well-Being During the COVID-19 Pandemic by : Bruce D. Meyer
Download or read book Changes in the Distribution of Economic Well-Being During the COVID-19 Pandemic written by Bruce D. Meyer and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the distribution of household consumption, income and savings from 2019 through the end of 2020 using the Consumer Expenditure Survey (CE) and other data. This is the first work to study the impact of the COVID-19 pandemic on economic well-being using nationally representative consumption data. We find that low percentiles of the consumption distribution see pre-pandemic growth and little change with the onset of the pandemic. On the other hand, higher percentiles of the consumption distribution do not increase before the pandemic and fall in 2020. Leveraging the rich demographics of our microdata, we find the most pronounced decline for high-educated families near the top of the consumption distribution and seniors in the top half of the distribution. The decrease in the top half is less evident for non-Whites. These patterns for consumption are different than those for income, particularly in the upper part of the distribution. Liquid assets increase in the upper half of the distribution, consistent with the divergence between the upper half of the income and consumption distributions. Our results suggest that the policy response to the pandemic averted a decrease in consumption for the most materially disadvantaged families, while changes in aggregate consumption accord with the observed patterns in the top of the consumption distribution. The changes for various types of consumption, and the distribution of those changes across the material resource distribution, are consistent with reductions in travel to work--which were large for those with greater material advantage--and restrictions on outlets for consumption.
Book Synopsis Further Evidence on the (In-) Efficiency of the U.S. Housing Market by : Felix Schindler
Download or read book Further Evidence on the (In-) Efficiency of the U.S. Housing Market written by Felix Schindler and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research in real estate finance and economics has been dealing with the topic of efficiency in the U.S. housing market for over 25 years. However, most recent research either examines local markets based on single homes or focuses on the Conventional Mortgage Home Price Indices (CMPHI) and Federal Housing Finance Agency (FHFA) indices. To our knowledge, however, there does not yet exist any study based on the Case-Shiller indices. This is surprisingly given that the Case-Shiller indices have several advantages over the CMPHI and FHFA indices, particularly since they serve as the underlying of derivatives traded at the Chicago Mercantile Exchange. This study examines the behavior of monthly house price changes for 20 cities in the U.S. and two nationwide indices from January 1987 to June 2009 incorporating both the longlasting boom and the steep and strong downturn of the U.S. housing market. The conducted analysis gives empirical evidence that house price changes in the U.S. exhibit certain patterns. The results show that the return generating process of U.S. housing markets differs significantly from the theoretical model of the random walk hypothesis. Without any exception, the conducted tests reject the null hypothesis of a random walk for all time series of house price changes. Furthermore, trading strategies are implemented as a robustness check and support the findings by generating excess returns in comparison to a buy-and-hold strategy. In general, we can conclude that investors might be likely to earn excess returns by using past information in the U.S. housing market, in particular when standardized derivatives of the indices are traded on exchange markets. However, due to data limitations, the analysis does not conduct the tests based on prices and price changes in derivatives. This analysis would give further empirical evidence whether inefficiencies in the U.S. housing market are exploitable or whether they are incorporated into the pricing process of tradable products and are thus not exploitable by investors.
