Search Results
Report
Assessing high house prices: bubbles, fundamentals, and misperceptions
We construct measures of the annual cost of single-family housing for 46 metropolitan areas in the United States over the last 25 years and compare them with local rents and incomes as a way of judging the level of housing prices. Conventional metrics like the growth rate of house prices, the price-to-rent ratio, and the price-to-income ratio can be misleading because they fail to account both for the time series pattern of real long-term interest rates and predictable differences in the long-run growth rates of house prices across local markets. These factors are especially important in ...
Journal Article
Does location matter?
Journal Article
The key to unlocking old money
Journal Article
The housing cycle in Eastern Massachusetts: variations among cities and towns
Numerous studies over the years have attempted to identify the impact of amenities on housing price levels within specific metropolitan areas. It is well know, for example, that local public goods, tax burdens, school quality, crime rates, and the like are capitalized into land values. This article divides the Eastern Massachusetts area into small groups of similar towns and examines the pattern of price changes across those groups during the boom, bust, and recovery periods. Since 1982, differences in appreciation rates across cities and towns have been particularly pronounces. The authors ...
Report
Subprime mortgage pricing: the impact of race, ethnicity, and gender on the cost of borrowing
Some observers have argued that minority borrowers and neighborhoods were targeted for expensive credit in 2004-06, the peak period for subprime lending. To investigate this claim, we take advantage of a new data set that merges demographic information on subprime borrowers with information on the mortgages they took out. In a sample of more than 75,000 adjustable-rate mortgages, we find no evidence of adverse pricing by race, ethnicity, or gender in either the initial rate or the reset margin. Indeed, if any pricing differential exists, minority borrowers appear to pay slightly lower rates, ...
Journal Article
Chasing good schools in Massachusetts
Working Paper
Unifying empirical and theoretical models of housing supply.
Housing supply plays an important role in the volatility of macroeconomic cycles and the speed with which house prices respond to changes in demand, yet it is understudied in the current literature. In this paper we present and estimate a new model of the supply of residential construction that is consistent with the theoretical treatment of land development and urban growth. This model shows that new housing construction is best described as a function of changes in house prices and costs rather than as a function of the levels of those variables. Previous research that uses the price levels ...
Journal Article
Regional housing supply and credit constraints
The construction of new housing plays a critical role in the economy, yet it is understudied by researchers. Increases in housing starts raise construction employment, and recent home buyers often purchase other consumer durables, leading through the multiplier effect to increased employment. Construction is especially important to the business cycle, because changes in residential construction tend to lead recessions and recovery.> Despite its importance, empirical research on housing supply is surprisingly rare. This article presents a new empirical model of housing supply that reflects the ...
Working Paper
Reverse mortgages and the liquidity of housing wealth
The article is organized as follows: Section I briefly describes the features of various types of reverse mortgages offered in the private and public sectors. Section II surveys the ~elevant literature that has focused on the savings patterns of the elderly and their demand for reverse mortgage products. Section III describes the sample of the elderly drawn from the Survey of Income and Program Participation (SIPP). Section IV analyzes the potential demand for reverse mortgages on the basis of age, fertility history, income, housing wealth, liquid wealth, and debt. Section V discusses the ...