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on Housing and Real Estate |
| By: | Ha Nguyen; Ashwini Arulrajhan; Carlo Pizzinelli; Mr. Ippei Shibata |
| Abstract: | This paper studies how house prices shape internal migration across Spain’s provinces and the implications for the spatial allocation of labor. Using a gravity-style framework, we estimate the causal impact of destination and origin house prices on bilateral migration flows between 2007-2023. To address the potential endogeneity of house prices, we instrument provincial house prices with a Bartik-style predictor of external inflows of foreign migrants, allowing this housing demand shock to have larger price effects in provinces with tighter land constraints. The instrumental variable (IV) estimates show that housing costs constitute a significant barrier to internal migrants—a 10 percent increase in destination house prices reduces inflows by about 4.0 percent, while a 10 percent increase in origin house prices increases outflows by about 2.8 percent. These push effects of origin house prices are larger for foreign-born and foreign-born young individuals compared to natives. Rental costs have even stronger effects than home sale prices. A simple back-of-the-envelope calculation suggests that if house prices in high-productivity provinces had not grown faster than the inflation over 2017-23, about 63, 000 more working-age individuals would have migrated to these provinces, as opposed to just 1, 700 (in net terms) in practice. While the direct implied GDP gain would have been small—about 0.05 percent over this period, such gains would accumulate over time if regional divergence in house prices were left unaddressed. Furthermore, this estimate does not factor in the much larger gains from attracting a large number of recent foreign immigrants—not studied here—to the most-productive regions. |
| Keywords: | Internal migration; housing prices; housing affordability; labor mobility; spatial allocation of labor; regional productivity; Spain; housing cost; housing price; rental price; origin-price elasticity; migration flow; price growth; price response; destination-price elasticity; rental-price elasticity; endogenous price dynamics; price appreciation; rental cost; prices increase; Migration; Housing; Productivity |
| Date: | 2026–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/065 |
| By: | Jaunius Karmelavičius; Ms. Julia Otten |
| Abstract: | This paper develops a life cycle model to study household choice under macroprudential borrower-based measures (BBMs). The model is extended to multiple heterogeneous households, allowing to assess both aggregate and distributional effects of BBMs on mortgage and housing demand. The framework is applied to Lithuanian and Slovak distributional data to quantify the impact of various BBM configurations. We find that the presence of binding BBMs can usefully dampen mortgage and house price growth. However, tight regulation may also redirect demand towards lower-valued housing, while pushing households into the rental market. In particular, loan-to-value (LTV) limits are most constraining for households with little or no initial wealth. This highlights the distributional consequences of BBMs and the importance of designing regulation to account for borrower characteristics. |
| Keywords: | Macroprudential policy; borrower-based measures; mortgages; life cycle model.; IMF working papers; household behavior; life cycle model; borrower characteristic; housing demand; Credit; Housing prices; Housing; Macroprudential policy instruments |
| Date: | 2026–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/066 |
| By: | DENG, Yongheng; INOUE, Tomoo; NISHIMURA, Kiyohiko; SHIMIZU, Chihiro |
| Abstract: | In population bonus periods, optimism about future housing demand fuels rapid construction and self-reinforcing price appreciation. In population onus periods, pessimism-amplified by the systematic failure of governments to revise demographic projections downward in a timely manner-drives structural oversupply, rising vacancy rates, and prolonged price stagnation. We formalise this mechanism through a present-value model in which the demographic regime asymmetrically shifts expected rent growth and the discount rate, and test it using annual panel data for 16 advanced economies over 1975- 2019. Pooled mean-group estimation shows that a rising old-age share significantly depresses long-run real house prices; the unanticipated ageing component (-8.826) substantially exceeds the government-projected component (-5.005). A rising youth share raises prices. Demographic structure further conditions monetary policy transmission: interest-rate cuts stimulate housing markets far more strongly in young than in ageing economies. |
| Keywords: | demographic optimism, demographic pessimism, population bonus and onus, housing vacancy and oversupply, demographic forecast errors |
| JEL: | E31 J11 R21 R31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:rcesrs:dp26-2 |
| By: | Daniel J. Wilson; Xiaoqing Zhou |
| Abstract: | From early 2021 to early 2024, the U.S. experienced an unprecedented boom in unauthorized immigration, followed by a rapid slowdown beginning in mid-2024. We provide the first systematic empirical assessment of the labor- and housing-market effects of this episode. Using newly available administrative microdata on individual immigrants, we construct measures of net unauthorized immigration at the national and local levels and exploit plausibly exogenous variation across local markets. We find that unauthorized immigrant worker flows (UIWF) increased local employment approximately one-for-one, without significant declines in local wages. These inflows also raised local house prices and rents without expanding housing supply, consistent with a housing demand shock in the face of short-run inelastic supply. Lastly, we find that UIWF reduced labor income per capita, consistent with downward wage composition of the local workforce, and strongly reduced government transfers. These findings should help inform policy debates surrounding how unauthorized immigrant labor supply impacts local labor and housing markets as well as public finances. |
| Keywords: | immigration; labor market; housing market; unauthorized immigration; post-pandemic |
| JEL: | E24 H53 J11 J21 J22 J23 J31 J61 R31 |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:102961 |
| By: | Sébastien Bourdin (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School); Jérôme Picault (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres); Arnaud Simon (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres) |
| Abstract: | The development of home ownership in the second half of the 20th century has been perceived as an asset and a significant contributor to wealth accumulation. However, rising property prices and increasingly stringent mortgage lending criteria have placed this model under pressure, particularly for younger generations. Recent territorial reforms and expansionary monetary policies, such as the European Central Bank's quantitative easing (QE) programme, have produced asymmetric effects on regional housing markets. This study applies a spatial econometric model to French departments to investigate how these developments have disproportionately benefited departments located near new regional capitals, thereby exacerbating disparities between these centres and their peripheral territories. By incorporating a spatial perspective, this analysis enriches our understanding of the dynamics between housing finance and regional development while shedding light on the implications of these transformations for financial stability and regional planning policy. |
| Keywords: | Regional disparities, Housing lending market, Monetary policy, Territorial reform, Economic geography |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05568167 |
| By: | Dykstra, Holly (University of Konstanz); Fernández Guerrico, Sofía (University of Konstanz) |
| Abstract: | Income-based rents in public housing create an earnings disincentive. We collaborate with a public housing authority to design a behaviorally informed program that returns part of the rent induced by higher earnings to residents. Importantly, the program automatically enrolled households and was explicitly designed to make the increased payoff to working salient. Using a difference-in-differences approach, we estimate that annual household-head earnings rise 17% ($1, 370/year) and public assistance falls 7.5%, with impacts on both intensive and extensive margins. These results provide evidence that an in-work benefit designed for salience can offset the earnings disincentive and affect follow-through labor market behavior. |
| Keywords: | labor supply, in-work benefits, salience, public housing |
| JEL: | D91 I38 J22 R38 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18483 |
| By: | Seltzer, Andrew; Wadsworth, Jonathan |
| Abstract: | This paper examines overcrowding, an indicator of low quality of life. We use household-level data from the 1929-31 New Survey of London Life and Labour to construct new estimates of overcrowding and analyze its geographic and economic determinants. We then examine how interwar public policy contributed to declining overcrowding. Improvements to public transportation led to increased worker earnings and housing expenditure. More importantly, public transport allowed workers to live in outer areas with lower overcrowding rates and commute inwards. Housing legislation reduced overcrowding by subsidizing new home construction, thereby increasing dwelling size, reducing rents, and improving housing quality. |
| Keywords: | overcrowding; public transportation; public housing; working-class London |
| JEL: | N94 N74 R21 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:137932 |
| By: | DIEWERT, W. Erwin; SHIMIZU, Chihiro |
| Abstract: | Measuring owner-occupied housing services in the CPI is one of the most contested problems in official statistics. We nest five approaches acquisitions, rental equivalence, user cost, financial user cost, and opportunity cost within the identity uₜ = rₜ + c - πₜ. Using 3.1 million Tokyo property records over 1986-2025, we show that conventional measures diverge sharply and can reverse sign across asset-price cycles. The opportunity cost approach eliminates negative user costs in all 480 sample months. The dominant CPI bias source is the price channel procyclical acquisitions and sticky rents not the weight channel. Our findings directly address the Eurostat HICP impasse. |
| Keywords: | Owner-occupied housing, CPI, cost-of-living index, financial user cost, rental equivalence, rent stickiness, hedonic regression, Tokyo, Eurostat HICP |
| JEL: | C43 D12 E31 R21 R31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:rcesrs:dp26-8 |
| By: | SHIMIZU, Chihiro |
| Abstract: | We develop a search-and-matching model of the housing market with a disclosure parameter θ governing price estimation precision, matching probability, and market participation. Transactions occur when the bid-ask gap falls within a fixed negotiation band; higher disclosure compresses the gap distribution. Model-implied welfare losses are decomposed into nine components. Disciplined by Japanese and UK institutional moments, total losses are 39.0% versus 8.4% of imputed rent. Reduced-form regressions using Japanese prefectural panel data are consistent with the model's two central predictions: higher disclosure coverage is associated with shorter time-on-market and lower price dispersion, with magnitudes close to the model-implied elasticities. Monte Carlo simulations indicate that welfare gains are positive in all simulated draws under the perturbation design. An online appendix develops a dynamic extension exploring broker exit, market collapse, and the akiya crisis. |
| Keywords: | Information disclosure, search and matching, housing mismatch, market participation, broker viability |
| JEL: | D83 R21 R31 D91 G51 R23 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:rcesrs:dp26-4 |
| By: | Joshua K. Hausman; John V. Leahy; John Mondragon; Johannes Wieland |
| Abstract: | Nominal interest rates have real effects. Residential mortgages and other real world debt contracts require a sequence of constant nominal payments. Combined with payment-to-income constraints, these nominal payments force borrowers to take on less debt when nominal interest rates rise, regardless of the behavior of the real interest rate. Survey data shows that conditional on the real rate, higher nominal mortgage interest rates reduce home buying sentiment. And increases in nominal mortgage rates reduce mortgage origination more in cities where payment-to-income constraints are more likely to bind. We explore the macroeconomic implications of payment-to-income constraints in a new Keynesian model modified to include a credit good. The payment-to-income constraint amplifies the effect of current short-term nominal interest rates on output and inflation, making the model less forward-looking than the standard new Keynesian model. |
| JEL: | E4 E50 G21 R21 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35033 |
| By: | SHIMIZU, Chihiro |
| Abstract: | We develop a vintage-accounts framework for real estate capital measurement . The Mutual Determination Lemma, formalises the equivalence among vintage prices, user costs, and depreciation rates a constraint routinely violated in applied work. The MaintenanceDepreciation Theorem shows that linearly increasing maintenance costs produce a strictly accelerating depreciation profile, rationalising geometric-type patterns. The Geometric PIM Decomposition Theorem proves that geometrically distributed retirement ages are necessary and sufficient for a geometric population PIM, establishing Diewert (2004) 's δ * = |
| Keywords: | Vintage capital, depreciation, user cost, TFP, Builder's Model, land structure decomposition |
| JEL: | C43 D24 D92 E22 R33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:rcesrs:dp26-9 |
| By: | SHIMIZU, Chihiro |
| Abstract: | We develop a dynamic theory of housing market collapse in which population decline interacts with information friction to produce irreversible market death. Declining transactions raise valuation uncertainty, eroding broker profitability and eliminating the intermediation channel through which most transactions are completed. We embed Jovanovic (1982)- Hopenhayn (1992) industry dynamics with forward-looking broker value functions and establish three main theorems, each proved in full: a tipping-point theorem characterising the separatrix between functioning and dead-market attractors; a dual-exit acceleration theorem showing that economic and demographic exit interact multiplicatively to compress the collapse timeline; and a welfare theorem establishing that disclosure is socially underprovided, with a convex marginal social benefit. The model delivers sharp monotone comparative statics throughout. |
| Keywords: | Housing market death, broker exit, information externalities, tipping points, dual-exit dynamics, akiya crisis |
| JEL: | D83 J11 R21 D92 R23 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hit:rcesrs:dp26-10 |
| By: | Sardo, Alessio; Grillo, Allegra; Kaczmarek, Angelika; Mateos Durán, Arnulfo Daniel |
| Abstract: | This article investigates how legal systems and legal experts across Europe respond to short-term rental accommodation (STRA), focusing on enforcement and authority allocation. It combines a comparative legal analysis of Germany, Poland, Italy and Spain with an experimental expert survey of approximately 180 legal scholars, embedding a strategic–interaction game that varies regulatory and market conditions. Findings reveal institutional lock-in: both legal systems as a whole and legal experts as individuals rely on traditional property/tenancy and competition frames, reinforcing path dependence. Experts also tend to overestimate compliance, even when fines are low and easily absorbed, underestimating the likelihood of strategic non-compliance. |
| Keywords: | short-term rental accommodation; Airbnb; overtourism; European Union competition law; affordable housing; tenancy models |
| JEL: | R21 R50 |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137828 |
| By: | Akos Horvath; Benjamin S. Kay |
| Abstract: | Building on queuing theory, we develop and empirically validate a novel theoretical model of residential mortgage supply. Our model gives insight into how the stochastic arrival and sequential servicing of loan applications affect mortgage origination. The model provides closedform predictions for lenders’ optimal response to changes in the level and price elasticity of mortgage demand. Using confidential HMDA data, we estimate that a one standard deviation increase in mortgage demand raises mortgage rate spreads by 3 to 8 basis points, loan quantities by 20 to 32 percent, and application processing times by 3 to 5 days. We also provide empirical evidence for the model prediction that a higher elasticity of mortgage demand moderates price increases due to demand shocks, which can limit lenders’ exploitation of their market power. |
| Keywords: | Mortgages; Market structure and competition; Prices; Production capacity |
| JEL: | C23 C26 D24 D40 G21 L11 |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:102999 |
| By: | Erik Heitfield |
| Abstract: | This paper examines how model uncertainty affects the price of homeowners insurance in Florida. We use unique data on expected loss rate projections from seven hurricane risk models approved by regulators for use in Florida property insurance rate filings to quantify model uncertainty. By combining these data with newly published information on local property insurance markets, we are able to empirically test the relationship between model uncertainty and insurance premiums across Florida ZIP codes and over time. Controlling for confounding variables and time-invariant latent factors that may be correlated with observed variables, we find strong empirical support for the hypothesis that greater dispersion among model forecasts leads to higher homeowners insurance premiums. Our findings suggest that, had model dispersion been ten percent lower than that observed 2021, a typical Florida homeowner would have saved $50 to $90 on her annual homeowners insurance premium. |
| Keywords: | Model uncertainty; Natural hazards; Risk management; Insurance |
| JEL: | D81 G22 G32 G41 |
| Date: | 2026–03–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:102998 |