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On the transmission of monetary policy to the housing market

Winfried Koeniger, Benedikt Lennartz and Marc-Antoine Ramelet

No 2021-06, Working Papers from Swiss National Bank

Abstract: We provide empirical evidence on the heterogeneous transmission of monetary policy to the housing market across and within countries. We use household-level data from Germany, Italy and Switzerland together with the respective monetary policy shocks identified from high-frequency data. We find that the pass-through of monetary policy shocks to rates of newly originated (fixed-rate) mortgages is twice as strong in Switzerland than in Germany and Italy. After an accommodative monetary policy shock, this is associated in the housing market with a larger immediate, and persistent increase of transitions from renting to owning; a stronger decrease in rents; and an increase of the price-rent ratio. Within Italy, we find a stronger pass-through to mortgage rates, housing tenure transitions and the price-rent ratio in the northern regions that have been characterized in the literature as more financially developed than the southern regions.

Keywords: Monetary policy transmission; housing market; home ownership; rents; house prices (search for similar items in EconPapers)
JEL-codes: E21 E52 R21 (search for similar items in EconPapers)
Pages: 73 pages
Date: 2021
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-ure
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Related works:
Journal Article: On the transmission of monetary policy to the housing market (2022) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home Ownership and Monetary Policy Transmission (2018) Downloads
Working Paper: Home ownership and monetary policy transmission (2018) Downloads
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