The price process of real assets, in particular real estate, is of interest to financial economists for a number of reasons. For example, since real estate is often used as collateral for loans that are used for other types of corporate investments, changes in real estate prices can affect the level of investment expenditures more generally. This relation between real estate prices and corporat...

We construct a quantitative equilibrium model of the housing market in which an unanticipated increase in the supply of housing triggers default mortgages via its e ect on house prices. The decline in house prices creates an incentive to increase the consumption of housing space, but leverage makes it costly for homeowners to sell their homes and buy bigger ones (they must absorb large capital ...

This paper investigates the effects of national and regional economic conditions on outcomes in the single-family housing market: housing prices, vacancies, and residential construction activity. Our three-equation model confirms the importance of changes in regional economic conditions, income, and employment on local housing markets. The results also provide the first detailed evidence on the...

We construct a quantitative equilibrium model of the housing sector that accounts for the homeownership rate, the average foreclosure rate, and the distribution of home-equity ratios across homeowners prior to the recent boom and bust in the housing market. We analyze the key mechanisms that account for these facts, including the preferential tax treatment of housing and inflation. We then use ...

This paper demonstrates how formal housing ® nance is the product of the perceptions that prevail among the middle and upper classes, who as policy-makers, econom ists and managers, determ ine how housing ® nance institutions ® x the terms and conditions of housing loans for the urban poor. They use affordability criteria that ® t the purchase or construction of a house in one go. However, affo...

Gasoline prices influence where households decide to locate by changing the cost of commuting. Consequently, the substantial increase in gas prices since 2003 may have reduced the demand for housing in areas far from employment centers, leading to a decrease in the price and/or quantity of housing in those locations relative to locations closer to jobs. Using annual panel data on ZIP codes and ...

We examine the effects of housing supply constraints on affordability, which we measure directly using quality-adjusted rent as well indirectly structure sizes, lot sizes and household location choices. Empirically, find that have only modest rents consumption despite their larger city growth price to purchase homes. Calibration a dynamic, spatial equilibrium model shows increase price-rent rat...