EconPapers    
Economics at your fingertips  
 

Expectations During the U.S. Housing Boom: Inferring Beliefs from Actions

Itzhak Ben-David, Pascal Towbin and Sebastian Weber

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: We assess the role of price expectations in forming the U.S. housing boom in the mid-2000s by studying the dynamics of vacant properties. When agents anticipate price increases, they amass excess capacity. Thus, housing vacancy discriminates between price movements related to shocks to demand for housing services (low vacancy) and expectation shocks (high vacancy). We implement this idea using a structural vector autoregression with sign restrictions. In the aggregate, expectation shocks are the most important factor explaining the boom, immediately followed by mortgage rate shocks. In the cross-section, expectation shocks are the major factor explaining price movements in the Sand States, which experienced unprecedented booms.

JEL-codes: E23 E71 G12 R31 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-mac and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://ssrn.com/abstract=3356865

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2019-8

Access Statistics for this paper

More papers in Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-24
Handle: RePEc:ecl:ohidic:2019-8