Central Bank Communication and House Price Expectations

Carola Binder, Pei Kuang and Li Tang

Journal of the European Economic Association, 2026, vol. 24, issue 2, 769-799

Abstract: We use a series of online surveys to study how US consumers’ house price expectations respond to interest rate expectations. Communication about interest rates has little effect on average house price expectations, since households have heterogeneous beliefs about the relationship between interest rates and house prices. When coupled with an explanation of the mortgage rate channel, communication about interest rates has much larger effects on house price expectations. We also show that audio and visual communication have additional effects on expectations beyond the effects of text-based communications. Consumers’ personal experiences appear to shape their mental models of the housing market and the responsiveness of their house price expectations to interest rate expectations.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/jeea/jvaf042 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:jeurec:v:24:y:2026:i:2:p:769-799.

Access Statistics for this article

Journal of the European Economic Association is currently edited by Romain Wacziarg

More articles in Journal of the European Economic Association from European Economic Association
Bibliographic data for series maintained by Oxford University Press ().