Stimulating Housing Markets

Nick Turner, Eric Zwick and David Berger
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Eric Zwick: University of Chicago

No 227, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We estimate the effect of the 2009 and 2010 First-Time Homebuyer Tax Credit program on house purchases and prices using variation across local geographies in ex ante exposure to the program. Using this instrument and a difference-in-differences design, we find that the program induced a cumulative increase in home purchases in high exposure places nearly double that of low exposure places. We find little evidence of a sharp reversal in the post period; instead, demand appears to come from several years in the future. While the policy had a limited impact as direct fiscal stimulus, it sped the process of reallocating homes from distressed sellers to fundamental buyers, stabilized house prices, and enabled substantial deleveraging.

Date: 2016
New Economics Papers: this item is included in nep-ure
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Related works:
Journal Article: Stimulating Housing Markets (2020)
Working Paper: Stimulating Housing Markets (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:227

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