Clustered housing cycles

Ruben Hernandez-Murillo, Michael Owyang and Margarita Rubio

Regional Science and Urban Economics, 2017, vol. 66, issue C, 185-197

Abstract: Using a panel of U.S. city-level building permits data, we estimate a Markov-switching model of housing cycles that allows cities to systematically deviate from the national housing cycle. These deviations occur for clusters of cities that experience simultaneous housing contractions. We find that cities do not form housing regions in the traditional geographic sense. Instead, similarities in factors affecting the demand for housing (such as population growth or availability of credit) appear to be more important determinants of cyclical co-movements than similarities in factors affecting the supply for land (such as the availability of developable land or the elasticity of land supply).

Keywords: Clustered Markov switching; Business cycles; Building permits; Co-movements (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 R31 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Clustered Housing Cycles (2015)
Working Paper: Clustered housing cycles (2013)
Working Paper: Clustered Housing Cycles (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:66:y:2017:i:c:p:185-197

DOI: 10.1016/j.regsciurbeco.2017.06.003

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