Stimulating Housing Markets

David Berger, Nick Turner and Eric Zwick

No 22903, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies temporary policy incentives designed to address capital overhang by inducing asset demand from buyers in the private market. Using variation across local geographies in ex ante program exposure and a difference-in-differences design, we find that the First-Time Homebuyer Credit induced a cumulative increase in home sales of 397 to 546 thousand, or 7.8 to 10.7 percent, nationally. We find little evidence of a sharp reversal of the policy response; instead, demand comes from several years in the future. The program likely sped the process of reallocating homes from distressed sellers to high value buyers, which stabilized house prices. The response is concentrated in the existing home sales market, implying the stimulative effects of the program were less important than its role in accelerating reallocation.

JEL-codes: E62 E65 G18 H31 R38 (search for similar items in EconPapers)
Date: 2016-12
New Economics Papers: this item is included in nep-mac and nep-ure
Note: CF ME PE
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Citations: View citations in EconPapers (9)

Published as DAVID BERGER & NICHOLAS TURNER & ERIC ZWICK, 2020. "Stimulating Housing Markets," The Journal of Finance, vol 75(1), pages 277-321.

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Related works:
Journal Article: Stimulating Housing Markets (2020)
Working Paper: Stimulating Housing Markets (2016)
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