The paper studies the impact of the portfolio constraint imposed by the consumption demand for housing (the “housing constraint”) on the household’s optimal holdings of financial assets. Since the ratio of housing to net worth declines as the household accumulates wealth, the housing constraint induces a life-cycle pattern in the portfolio shares of stocks and bonds. For reasonable degrees of r...

We study sources and consequences of uctuations in the U.S. housing market. Slow technological progress in the housing sector explains the upward trend in real housing prices of the last 40 years. Over the business cycle, housing demand and housing technology shocks explain one-quarter each of the volatility of housing investment and housing prices. Monetary factors explain less than 20 percent...

This paper models the price and income elasticity of retail finance in Australia using aggregate quarterly data and an autoregressive distributed lag (ARDL) approach. We particularly focus on the impact of the global financial crisis (GFC) from 2007 onwards on retail finance demand and analyse four submarkets (period analysed in brackets): owneroccupied housing loans (Sep 1985–June 2010), term ...

In this paper a dynamic household model in connection with a comprehensive urban housing market model for Amsterdam is presented. Household dynamics is modelled here by using the methodology of multidimensional demography. A consistent analysis of the components of a dynamic spatial housing market system incorporating various submodules, multiple factors, spatial aggregation levels, and degrees...

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 ...

The main objective of this paper is to give an overview of the most commonly used housing policies and to illustrate their economic impact. To facilitate the analysis, we first introduce a simple two-period housing demand model for owner-occupied houses and rental houses. We then add a standard stock-flow housing supply model. Using this modelling framework, we explain the qualitative effects o...

Paper Five – BME Housing needs and aspirations Sanna Markkanen With Anna Clarke, Alex Fenton, Alan Holmans, Sarah Monk and Christine Whitehead Cambridge Centre for Housing and Planning Research January 2008 This is the fifth of a suite of eight papers drawing on research carried out into demographic, spatial and economic impacts on future affordable housing demand. For full details on the metho...

The examples given in the introduction to this monograph provide persuasive arguments that the combination of inflation and the traditional mortgage instrument imposes burdens on households and thrift stitutions, burdens which are likely to have impacts in the housing market and ultimately on the construction sector. We are interested in whether or not the existing literature, summarizing empir...

Housing demand shocks in standard macroeconomic models are a primary source of house price fluctuations, but those have difficulties generating the observed large volatility prices relative to rents. We provide microeconomic foundation for reduced-form housing with tractable heterogenous-agent framework. In our model heterogeneous beliefs, an expansion credit supply raises optimistic buyers and...