AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
Housing bubble 2021 usa12/4/2023 ![]() Applying a few standard assumptions to this analysis-that the average person’s housing preferences change little over time that the relevant “discount rate” investors apply to a housing investment is relatively constant over decades and that most investors expect house prices to be related in a stable way to household or national incomes-an economist would expect the house price-to-rent ratio to fluctuate somewhat but to show no persistent increase or decrease. If all housing services were bought by one party from another-that is, if everyone rented from a landlord-this would be relatively easy. Ludvigson and Stijn van Nieuwerburgh, “The Macroeconomic Effects of Housing Wealth, Housing Finance and Limited Risk Sharing in General Equilibrium,” Journal of Political Economy, 2017, Vol. 67-92 Carlos Garriga, Rodolfo Manuelli and Adrian Peralta-Alva, “A Macroeconomic Model of Price Swings in the Housing Market,” American Economic Review, 2019, Vol. How does one judge whether a house selling at a given price (or the housing market generally) is “expensive” or “cheap,” “overvalued” or “undervalued”? One approach economists use is to compare the price to a measure of the housing unit’s “fundamental value.” For example, see Charles Himmelberg, Christopher Mayer and Todd Sinai, “Assessing High House Prices: Bubbles, Fundamentals and Misperceptions,” Journal of Economic Perspectives, 2005, Vol. What Is the “Fair Value” of a House? The First Step in Analyzing Value: Rented Housing
0 Comments
Read More
Leave a Reply. |