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on Housing and Real Estate |
| By: | Chi-Young Choi; Alexander Chudik; Aaron Smallwood |
| Abstract: | Growth in house prices is highly persistent and therefore more predictable than that of other assets, such as stocks. |
| Keywords: | real estate; banking; finance; housing prices; monetary policy |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:98322 |
| By: | Kanayama, Yuki; Sadayuki, Taisuke |
| Abstract: | Why do derelict houses persist in urban areas despite strong demand, and what are their effects on neighbourhoods? This paper sheds light on a simple mechanism — speculation over future real estate value increases — that explains this puzzle, and employs empirical strategies to test this mechanism and quantify the disamenity effects of derelict houses. First, we develop a dynamic discrete choice model showing that expectations of future urban regeneration can incentivise property owners to delay redevelopment, thereby prolonging dereliction. Using variation induced by urban regeneration plans in central Tokyo, we find that properties located in designated regeneration areas are 6-14% more likely to be derelict. Second, we estimate the effect of derelict houses on nearby rents using future regeneration plans as an instrument — affecting dereliction but not current rents directly. Our 2SLS results show that one additional derelict house within 80 metres reduces rents by 1.5% on average. The effect is magnified to up to 4.5% in areas with low accessibility to public safety services, suggesting that renters’ concerns about fire and crime risks amplify the disamenity effects of derelict properties. Our findings suggest that rational forward-looking behaviour can reduce effective housing supply and generate negative neighbourhood externalities, highlighting an unintended consequence of place-based urban regeneration policies. |
| JEL: | D62 R11 R21 R31 R52 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138519 |
| By: | Rivard, Alexandre; Merkley, Eric; Stecula, Dominik (University of Pennsylvania) |
| Abstract: | A key barrier to ensuring the growth of the housing supply is local opposition to development, often called NIMBYism (Not In My Back Yard). We use pre-registered studies on representative samples of Canadians and Americans to explore the values-based correlates of opposition to local housing development and the values-based conditionality of the effects of certain housing characteristics (i.e. affordable housing) on housing opposition. We find that nativism, racial resentment, and moral traditionalism are generally associated with more negativity towards local housing development with some modest differences between countries and outcome measures. Nativism is connected to opposition to development in Canada, while racial resentment stands in its place in the United States. Traditionalism is associated with opposition to development in both countries. Nativism appears to be the most important correlate of negative beliefs about the consequences of new housing, such as harming neighbourhood character. The connection between housing characteristics and development opposition is also conditional on values. Respondents are generally more supportive of affordable over market-rate housing, but this is only true among those with low racial resentment, traditionalism, nativism, and free-market attitudes, and high levels of egalitarianism. Our findings highlight the importance of values in shaping attitudes towards new housing. |
| Date: | 2026–05–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:fg6d5_v2 |
| By: | Sixian Shu; Midori Wakabayashi |
| Abstract: | This paper examines how changes in school admission rules affect housing market capitalization across urban neighborhoods in a deterministic public school assignment system. We study the 2020 Synchronous Enrollment Policy (SEP) in Guangzhou, China, which synchronized public and private school admissions and replaced selective private admissions with lottery allocation, thereby increasing uncertainty in private school enrollment while leaving public school catchments unchanged. Using transaction-level data on second-hand housing sales from 2018 to 2021 matched with official public primary school catchment maps, we implement a difference-in-differences strategy comparing price changes across neighborhoods inside and outside high-quality public school districts before and after the reform. We find that the policy increased the housing price premium associated with high- quality public school zones by approximately 4.2 percent. The capitalization effect exhibits systematic spatial heterogeneity: it is stronger in urban core districts, attenuates with residential distance to assigned schools, and is amplified in areas with greater exposure to elite private schools. These findings suggest that the housing market consequences of admission reforms depend critically on pre-existing educational competition structures and intra-urban spatial structure. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:85 |
| By: | Yihan Hu; Cemil Selcuk |
| Abstract: | The US housing market exhibits pronounced seasonal cycles: prices and sales rise through spring, peak in summer, and decline through autumn and winter. Since 2021, this pattern has shifted earlier in the calendar year, with spring strengthening at the expense of the traditional summer peak. A leading explanation for housing market seasonality is the search-and-matching model of Ngai and Tenreyro (2014), which links these cycles to household mobility through a thick-market mechanism. In this framework, periods with higher mobility generate thicker markets and higher prices and transaction volumes. Viewed through this lens, a shift in the seasonal cycle of prices and sales raises the question of whether the timing of household moves has changed. Did residential mobility shift earlier in the calendar year after 2021? We find that it did. Using SIPP data, and corroborating evidence from Google Trends indicators, we document a post-2021 shift in mobility toward spring. We extend the model to a monthly frequency, prove the existence and uniqueness of the equilibrium, and calibrate it to the observed mobility patterns. The calibrated model reproduces the spring shift in both prices and transaction volumes, consistent with the view that a change in the timing of household mobility alone can account for the recent shift in housing market seasonality. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.21358 |
| By: | Tomohito HONDA; Chihiro SHIMIZU; Iichiro UESUGI |
| Abstract: | This study investigates how unconventional monetary policy affects the economy when the central bank purchases equities issued by non-bank institutions, focusing on the Bank of Japan's Real Estate Investment Trust (REIT) purchase program. Unlike previous studies that examine the impact of monetary policy on the real estate sector primarily through the bank lending channel, this program influences the sector through the risk-taking channel by purchasing equities issued by non-bank institutions. Using detailed data on REITs, we find that: (1) the central bank’s purchases lowered both equity and loan costs for targeted REITs; (2) these REITs acquired riskier properties with higher expected returns; (3) banks reallocated lending from listed real estate companies toward the REIT sector, especially targeted REITs; and (4) real estate prices of properties adjacent to those purchased by REITs increased more than those of more distant properties and the tendency is more pronounced when the properties were purchased by targeted REITs. Together, these findings indicate that central bank equity purchases stimulate risk-taking in targeted non-bank institutions and affect the broader loan and real estate market. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26037 |
| By: | Vaibhav Rangan |
| Abstract: | I study coordination failures in housing development markets with network effects, where the value of building depends on aggregate supply. When network effects are sufficiently strong and convex, multiple equilibria arise: a low-supply coordination failure and a high-supply outcome. Without a coordination mechanism, equilibrium is indeterminate. I introduce a large developer who moves first in a Stackelberg game, committing to housing supply before atomistic developers make entry decisions. The main result is that the large developer always commits at least to the high-supply equilibrium, eliminating the coordination failure by pushing past the unstable threshold that separates the low and high outcomes. The result is unconditional; it holds for general demand functions and cost distributions, and does not depend on which stable continuation equilibrium materializes. The leader's commitment inverts standard monopoly intuition: first-mover commitment can improve welfare by resolving a coordination problem that atomistic markets cannot solve on their own. I also characterize when the developer builds beyond the high equilibrium into a monopoly region, and show that the market underprovides housing relative to the social optimum. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.12559 |
| By: | Wolf, Levi John (University of Bristol) |
| Abstract: | The private rental sector is a massive and important part of the society and economy of any nation. The private rental sector's role as a major source of speculative investment, in addition to its critical role as a necessary good for human survival, drives intense interest in the contemporary structure and regulation of the private rental sector. As a consequence, regulation of the private rental sector is controversial. This paper examines one such regulation strategy in the United Kingdom, discretionary licensing strategies, which require minimum quality standards for rental properties in certain areas or that fit certain characteristics. While study of local housing policy is rare, academic study of private rental sector regulations *beyond* price controls are rarer still. Hence, this paper seeks to build understanding about the specific short-run impacts of the adoption of discretionary licensing policies in Bristol from 2019 to 2024 using spatial causal inference techniques. I find that there is no significant impact on market clearing, while the licensing scheme has a moderating effect on rent level growth at the boundary. This suggests that private rental sector regulation targeting minimum quality standards, such as those guaranteeing minimum energy efficiency, gas and electric safety, and other quality inspection checks, may serve to cool off rental markets, increasing clearing speed while reducing the average rate of rent growth. |
| Date: | 2026–05–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:nuqth_v1 |
| By: | Wasserman, Jacob L.; Barrall, Aaron; Millard-Ball, Adam PhD; Lee, Amy PhD |
| Abstract: | “Major transit stop”—how these three words are defined determines what can be built where, throughout much of California. To address housing shortages and reduce reliance on driving, California has enacted a number of laws that streamline housing approvals and remove zoning constraints in areas near high-quality transit. Many of these laws allow for greater density, less parking, and faster permitting within half a mile of a “major transit stop, ” defined in California Public Resources Code § 21064.3 as “an existing rail or bus rapid transit station, a ferry terminal served by either a bus or rail transit service, ” or “the intersection of two or more major bus routes with a frequency of service interval of 20 minutes or less during the morning and afternoon peak commute periods.” In some cases, planned future transit stops included in long-range regional transportation plans may also qualify. |
| Keywords: | Physical Sciences and Mathematics |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt8hk277vb |
| By: | Paul S. Willen |
| Abstract: | The mortgage spread—the gap between the 30-year fixed mortgage rate and the yield on 10-year U.S. Treasury notes—is currently about 200 basis points, or 2 percentage points. Mortgages and Treasury securities have different cash flows, credit risk, and lender intermediation margins, but even after those differences are accounted for, a large and volatile gap remains. In this brief, the author argues that this remaining gap largely reflects the price of the mortgage prepayment option—a borrower’s right to pay off their mortgage at any time without incurring a penalty. |
| Keywords: | mortgage rate; mortgage-backed securities; Treasury yields; prepayment; yield curve |
| JEL: | E43 G21 |
| Date: | 2026–05–19 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:103270 |
| By: | Suvy Qin; John L. Voorheis |
| Abstract: | Flooding is among the most salient natural hazards facing households in the United States. A large body of evidence has documented a pattern of disproportionate social vulnerability in floodplains. However, little evidence exists on how household-level exposure to flood risk is distributed. We fill this gap by combining parcel-level flood risk with confidential linked survey and administrative data held at the US Census Bureau. Although net migration to Census blocks in floodplains has increased in recent years, there has been essentially no net migration to parcels with flood risk or change in the overall share of households living in floodplains. Income gradients in flood risk are highly non-linear at the household level, with slightly negative income gradients for the bottom 90 percentiles of the income distribution that are dwarfed by disproportionate exposure in the top decile, especially when considering multiple property ownership. This nonlinearity is largely driven by differences in building type and homeownership within narrow income groups. In contrast to the conclusions in the literature using aggregate data, our household-level analysis suggests that households in floodplains are less disadvantaged and increasingly protected from the impacts of flooding, even as a vulnerable subpopulation of low-income, uninsured homeowners remains. |
| JEL: | Q0 Q5 Q54 R30 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35204 |
| By: | Patrick Coate; Kyle Mangum |
| Abstract: | This paper shows the declining trend in internal migration in the United States is primarily due to increasing home attachment in “fast locations, ” areas with relatively high rates of population turnover. These locations were population growth destinations in the 20th century, with transient populations that settled as regional population growth converged. The qualitative patterns of the U.S. experience can be generated by a model of location choice in heterogeneous regions with overlapping generations when the population has a home bias that varies endogenously with the history of population change. Using a novel measure of home attachment, this paper estimates a structural model of migration that distinguishes moving frictions from home utility. Simulations quantify channels of the mobility decline. Rising home attachment accounts for much of the decline, predominantly in fast locations. Population aging explains most of the remainder but in a more spatially neutral way. |
| Keywords: | declining internal migration; labor mobility; home attachment; rootedness; local ties; conditional choice probability estimation |
| JEL: | J61 R23 R11 C50 |
| Date: | 2026–05–11 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103190 |