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Keywords:housing market 

Briefing
Real Estate Commissions and Home Search Efficiency

In the U.S. residential housing market, homebuyers' agents typically offer free house showings and collect a commission equal to 3 percent of the price of the home bought by their clients. Our analysis shows that, by deviating from cost basis, this compensation structure may lead to elevated home prices, overused agent services and prolonged home searches. We explain that shifting to a simple a la carte compensation structure may improve home search efficiency and social welfare.
Richmond Fed Economic Brief , Volume 24 , Issue 08

Journal Article
Comparing Measures of Rental Prices Can Inform Monetary Policy

Shelter makes up one-third of the Consumer Price Index (CPI) and is important to understanding inflation developments. Comparing two measures of shelter prices—the official U.S. Bureau of Labor Statistics (BLS) dataset and the Zillow rental price index—shows that the Zillow series leads the BLS series by about six to 10 months. Changes in the Zillow series should eventually be reflected in the BLS data, so any positive gap between the two suggests that tighter monetary conditions may be needed to lower CPI inflation.
Economic Bulletin

Journal Article
Opinion: Unique Challenges in the Housing Market

The Fed's monetary tightening over the past year has had an immediate effect on the housing market. The average interest rate on a 30-year fixed-rate mortgage more than doubled from about 3 percent at the end of 2021 to around 7 percent by the fall of 2022. Higher mortgage rates — so long as inflation is not expected to stay high — raise the real cost of borrowing to buy a new home, so it is no surprise that new home sales declined throughout 2022. But if the Fed didn't act to bring inflation down, we could expect lenders to charge high rates simply to break even in real terms. The ...
Econ Focus , Issue 1Q , Pages 36

Report
Housing Trends: Older Households Are Moving Less, and Multigenerational Living Is Rising

The rate at which older households changed residences dropped 11.1% from 2019 to 2023, while the decline among younger households was 7.8%. On average, older households have 2.4 bedroom per person in the home. The number of households in which adult children have moved in with their parents is increasing rapidly.
Current Policy Perspectives , Paper 2025-9

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