The short- and long-run effects of remote work on U.S. housing markets

Greg Howard, Jack Liebersohn and Adam Ozimek

Journal of Financial Economics, 2023, vol. 150, issue 1, 166-184

Abstract: Remote work has increased the demand for housing and changed the demand for the location of that housing. Because housing supply is heterogeneous across space and more elastic in the long-run, the effects on rents and populations may differ over time. We use the lens of a spatial housing model with heterogeneous housing supply elasticities to identify the housing and location demand changes from 2020–2022, and show that the same shocks will have different effects in the long run. Even though rents and prices increased significantly in the short-run, we estimate that in the long-run, increased housing demand will increase rents by only 1.8 percentage points, and that changing location demand will decrease rents by 0.3 percentage points, with a more negative impact on cities in which CPI is measured and cities that were initially expensive.

Keywords: Housing markets; Housing affordability; Labor mobility; Regional inequality (search for similar items in EconPapers)
JEL-codes: E31 R23 R31 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:150:y:2023:i:1:p:166-184

DOI: 10.1016/j.jfineco.2023.103705

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