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on Housing and Real Estate |
| By: | Justin Katz; Paul S. Willen |
| Abstract: | We use parcel-level data to provide new facts on the amount and distribution of land available for residential development, focusing on New England housing markets from 2007 to 2021. Most buildable parcels are small, and large buildable parcels are scarce in most geographic markets. Large buildable parcels are less available in more populous markets, become scarcer as populations grow, and have become scarcer over time. Markets with fewer large parcels experience higher house price growth and residential development that is lower relative to house price growth. We present evidence consistent with developer returns to scale in parcel size, meaning that fragmentation of buildable land across small, disjoint parcels increases house prices by reducing construction productivity and making development less responsive to demand. In counterfactual simulations from a simple calibrated model, we show that recombining small buildable parcels into larger ones while holding the total amount of buildable land fixed would increase supply, increase construction productivity, and slow house price growth. |
| Keywords: | housing supply; land fragmentation; construction productivity; land use |
| JEL: | R31 R52 R14 |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:103317 |
| By: | Rowena Gray; Ronan Lyons; Allison Shertzer |
| Abstract: | The Rent of Primary Residence (RoPR) series constructed by the Bureau of Labor Statistics implies that nominal rental prices increased by just 2.6 percent per year from 1914 to 2006 while overall prices grew by 3.3 percent. We show that this “falling real rents” puzzle can be explained by the evolving treatment of shelter in the Consumer Price Index (CPI). In this paper, we construct a new, methodologically consistent shelter price series using the Historical Housing Prices (HHP) Project rental index. We also construct a revised set of shelter weights going back to 1914 and combine it with the price series to create an alternate CPI that applies the owners’ equivalent rent concept of shelter consistently across time. The HHP shelter price series increases by a factor of 28.4 (compared with the 10.7 increase in RoPR) and lifts average CPI growth from 3.3 percent to 3.6 percent per year. The revised series eliminates the long-run decline in real rents in the CPI and provides a new benchmark for assessing trends in the cost of living and real income in the United States over the 20th century. |
| Keywords: | Housing prices; rental indices; CPI; housing markets; cost of living |
| JEL: | E3 N1 O18 R3 |
| Date: | 2026–05–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103311 |
| By: | Enrique Martínez García; Efthymios Pavlidis |
| Abstract: | A home is not only a place to live. It is a long-lived asset whose value reflects the housing service it provides over time and the return buyers require, given interest rates and risk. The ongoing combination of high house price-to-rent ratios and strained affordability suggests housing remains a macroeconomic vulnerability, though financial conditions appear more resilient than before the housing bust and subsequent Global Financial Crisis of 2008. |
| Keywords: | housing affordability; price-to-rent ratio; valuations |
| Date: | 2026–05–19 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:103295 |
| By: | Marek Folprecht |
| Abstract: | Prices of houses in flood risk zones are subject to a price discount reflecting the risk of losses caused by floods. First, the article establishes a framework for pricing flood risk using the expected discounted loss approach, based on the capital asset pricing model and the Gumbel mixture model of estimated likelihood and impacts of flood risk events. The measure advantage is dimensionality reduction and interpretability. Second, the resulting measure of flood risk is tested to assess whether it can explain differences in house prices using a large data sample from the Czech Republic in 2024. I show that the flood risk measure, expected discounted loss, can be a significant predictor of house prices, but its explanatory power depends critically on the data source used for determining flood risk zones. The results indicate that the market does price flood risk but tends to underestimate its magnitude. Moreover, it does not adjust the weight assigned to flood risk even after severe flood events. Lastly, I discuss the potential use of the obtained flood risk loss distributions for the calculation of Value at Risk and other risk measures of portfolios, including direct real estate or real estate used as collateral. |
| Keywords: | Expected discounted loss, Flood risk, House prices, Hedonic pricing model, Czech Republic |
| JEL: | G32 Q53 R31 |
| Date: | 2025–12–14 |
| URL: | https://d.repec.org/n?u=RePEc:prg:jnlwps:v:6:y:2026:id:6.002 |
| By: | Dennis Guignet; Anna Silva |
| Abstract: | We conduct a meta-analysis of hedonic studies examining the effects of potable water contamination on home values. We assess the robustness of the results to alternative weights, test for publication bias, and estimate meta-regressions to assess price effect heterogeneity. We find that the adverse effects on home values are similar across public versus private water sources, and that declines in home values persist for more than 10 years, on average. When contamination is detected the average decrease in home values is about 4-5%; and this effect increases to a 12-13% depreciation when contamination levels exceed regulatory or health-based standards. Key Words: benefit transfer, drinking water, groundwater, hedonic, housing value, property value, meta-analysis |
| JEL: | Q51 Q53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:apl:wpaper:26-06 |
| By: | Kyle Raze; Rachel M. Shattuck; David Pritchard; Thomas B. Foster; Sonya R. Porter; Denise Flanagan-Doyle; Veronica Garrison; Jacqueline Bachand; Ethan Krohn |
| Abstract: | Federal housing assistance programs, such as those run by the U.S. Department of Housing and Urban Development (HUD), have been shown to reduce rent burden and improve housing stability for program participants, which may in turn have downstream impacts on their labor market attachment and career trajectories. However, existing studies from individual cities or states provide mixed evidence on the association of housing assistance with labor market outcomes. By linking HUD administrative records to matched employee-employer earnings records from the Longitudinal Employer-Household Dynamics (LEHD) program, we document how the labor market trajectories of program participants change as they enter and exit federal housing assistance programs, examining outcomes over a 14-year window surrounding entry or exit. In our analysis of entry, we find that the employment rates and earnings of first-time HUD program participants begin to increase upon entering a HUD program, which represents a reversal of prior declining trends in these outcomes. Suggestive of a positive association, these increases in employment and earnings trends exceed those of low-income non-participants from the American Community Survey (ACS). In our analysis of exits, we find that program participants who eventually leave a HUD program have increasing pre-exit trends in employment and earnings that then flatten upon exiting. Comparing these negative changes in trend to the relatively stable trajectories of those who remain in HUD programs throughout the analysis suggests that exits are associated with diminished employment and earnings trajectories. |
| Keywords: | Housing Choice Voucher, project-based rental assistance, labor supply, in-kind transfers, linked employer-employee data |
| JEL: | I38 J22 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-31 |
| By: | Manu García; Carlos Garriga |
| Abstract: | Denials moved closely with rising U.S. mortgage rates in 2022 and 2023, showing higher borrowing costs—not weaker applicants—drove the increased rejections. |
| Keywords: | mortgage denials; mortgage rates |
| Date: | 2026–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103318 |
| By: | Masataka Mori; Juan M. Sanchez |
| Abstract: | HELOC use has surged broadly in recent years as homeowners seeking liquidity have pursued alternatives to refinancing low fixed-rate mortgages. |
| Keywords: | home equity lines of credit (HELOCs); mortgage finance; refinancing |
| Date: | 2026–06–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103356 |
| By: | Hugh Montag; Randal J. Verbrugge |
| Abstract: | Shelter inflation, driven by continuing-tenant rents, accounts for one-third of the consumer price index (CPI). Yet continuing-tenant rent inflation, notoriously sticky, has attracted almost no theoretical attention. Standard sticky price theories cannot explain the basic facts. We provide a simple theory yielding implicit contracts as an equilibrium. The landlord will wish to renege when costs rise; reputation is unavailable to enforce the contract. A well-established mechanism serves: landlord off-equilibrium-path play might result in renter frustration and endogenous breakup. Our implicit-contracts theory gracefully explains nominal (rather than real) rigidity, and provides a microfounded explanation of key rental market facts. |
| Keywords: | continuing-tenant rent; inflation; frustration; customer anger; costly punishment |
| JEL: | R31 R21 E31 |
| Date: | 2026–05–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:103313 |
| By: | Peter Lindner (Economic Analysis Division); Aleksandra Riedl (Oesterreichische Nationalbank, Foreign Research Division) |
| Abstract: | This paper provides the first systematic cross-country evidence on mort gage default triggers among households in Europe. Using harmonized micro data from the Household Finance and Consumption Survey (HFCS) covering 18 countries, we study three mutually exclusive drivers of default: liquidity stress, negative equity, and the double trigger—when households face both simultaneously. The double trigger is by far the strongest predictor of default, raising the probability of non-performing loans by about 16 percentage points (pp). Liquidity problems alone and negative equity alone also increase default risk, but more moderately (by around 4–6 pp each). Importantly, the role of negative equity varies across institutional contexts: it is weaker in countries with strong debt enforcement. This pattern is consistent with single-country evidence showing that lower effective default costs increase the relevance of equity-related incentives. By providing the first harmonized European evi dence on how these trigger states translate into mortgage distress, the paper offers an empirical foundation for borrower-based macroprudential policies. |
| Keywords: | Default, NPL, HFCS, Household Finance |
| JEL: | D10 D14 G21 |
| Date: | 2026–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:onb:oenbwp:279 |