Housing Boom-Bust and Price-Rent Dynamics Over the Business Cycle PDF Download

Author: Xuetao Song
Publisher:
ISBN:
Category :
Languages : en
Pages : 53

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Book Description
Housing market is documented with several observations: considerably larger fluctuations in housing prices than in rents, correlation between housing prices and investment, lead-lag pattern of housing and macroeconomic variables. This paper constructs a two-sector housing model with home owning/renting heterogeneity and housing financial frictions to explain the observed facts in housing markets and to explore the interactions between housing markets, rental markets and mortgage markets. The model provides theoretical explanations to the housing boom-bust and the transmission mechanism of housing market fluctuations to business cycles. The paper predicts that house rent-price ratio correlates with expected house price growth and changes with temporary shocks in financial constraints and/or persistent changes in mortgage rates. Model extension suggests that home ownership is endogenously determined by down payment restrictions and aggregate shocks. The model matches with the empirical evidences observed in house market. The quantitative results suggest that the financial shock generates house price fluctuation considerably larger than rents, which explains the observed price-rent fluctuations.

Author: Thomas Sowell
Publisher: Basic Books (AZ)
ISBN: 0465018807
Category : Business & Economics
Languages : en
Pages : 194

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Book Description
Explains how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The "creative" financing of home mortgages and "creative" marketing of financial securities based on these mortgages to countries around the world, are part of the story of how a financial house of cards was built up--and then collapsed.

Author: Thomas Sowell
Publisher: Basic Books
ISBN: 0786747552
Category : Business & Economics
Languages : en
Pages : 258

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Book Description
This is a plain-English explanation of how we got into the current economic disaster that developed out of the economics and politics of the housing boom and bust. The "creative" financing of home mortgages and the even more "creative" marketing of financial securities based on American mortgages to countries around the world, are part of the story of how a financial house of cards was built up -- and then suddenly collapsed. The politics behind all this is another story full of strange twists. No punches are pulled when discussing politicians of either party, the financial dangers they created, or the distractions they created later to escape their own responsibility for what happened when the financial house of cards in the financial markets collapsed. What to do, now that we are in the midst of an economic disaster, is yet another story -- one whose ending we do not yet know, but one whose outlines and implications are explored to reveal some surprising and sobering lessons.

Author: Peter King
Publisher: Routledge
ISBN: 1135173192
Category : Architecture
Languages : en
Pages : 251

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Book Description
Housing bubbles burst, creating economic misery for millions. Over the past thirty years, the culture of property ownership has become so ingrained that policy makers, bankers and households have taken for granted that housing is a good investment and forgotten about the bust. Explaining how the current crisis in housing markets has arisen, this topical and sharp analysis considers the causes of house price bubbles and the reason for the collapse in markets worldwide. Written for students, it explains the economic cycle of housing, ways in which future booms and busts can be mitigated and how the lessons of this latest housing bubble can finally be learned.

Author: Thomas Sowell
Publisher: ReadHowYouWant.com
ISBN: 145960931X
Category : Business & Economics
Languages : en
Pages : 370

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Book Description
Scary headlines and scarier statistics tell the story of a financial crisis on a scale not seen in decades - certainly not within the lifetime of most Americans. Moreover, this is a worldwide financial crisis. Financial institutions on both sides of the Atlantic have either collapsed or have been saved from collapse by government bailouts, as a result of buying securities based on American housing values that eroded or evaporated.Now completely revised in paperback, The Housing Boom and Bust is designed to unravel the tangled threads of that story. It also attempts to determine whether what is being done to deal with the problem is more likely to make things better or worse.

Author: Fred Harrison
Publisher: Shepheard-Walwyn Publishers
ISBN:
Category : Business & Economics
Languages : en
Pages : 304

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Book Description
This work identifies an 18-year property cycle, recurring with remarkable regularity and similarity over the last 200 years, in different countries under different political, economic and cultural conditions.

Author:
Publisher:
ISBN: 9789289915885
Category :
Languages : en
Pages : 57

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Book Description
This paper explores the link between agent expectations and housing market dynamics. We focus on shifts in the fundamental driving forces of the economy that are anticipated by rational forward-looking agents, i.e. news shocks. Using Bayesian methods and U.S. data, we find that news-shock-driven-cycles account for a sizable fraction of the variability in house prices and other macroeconomic variables over the business cycle and have also contributed to run-ups in house prices over the last three decades. By exploring the link between news shocks and agent expectations, we show that house price growth was positively related to inflation expectations during the boom of the late 1970's but negatively related to interest rate expectations during the mid-2000's housing boom.

Author: Andrew T. Carswell
Publisher: SAGE Publications
ISBN: 1483305945
Category : Political Science
Languages : en
Pages : 1308

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Book Description
Since publication of the groundbreaking Encyclopedia of Housing in 1998, many issues have assumed special prominence within this field and, indeed, within the global economy. For instance, the global economic meltdown was spurred in large part by the worst subprime mortgage crisis we′ve seen in our history. On a more positive note, the sustainability movement and "green" development has picked up considerable steam and, given the priorities and initiatives of the current U.S. administration, this will only grow in importance, and increased attention has been given in recent years to the topic of indoor air quality. Within the past decade, as well, the Baby Boom Generation began its march into retirement and senior citizenship, which will have increasingly broad implications for retirement communities and housing, assisted living facilities, aging in place, livable communities, universal design, and the like. Finally, within the last twelve years an emerging generation of young scholars has been making significant contributions to the field. For all these reasons and more, we are pleased to present a significantly updated and expanded Second Edition of the Encyclopedia of Housing.

Author: Ms.Deniz Igan
Publisher: International Monetary Fund
ISBN: 1475505671
Category : Business & Economics
Languages : en
Pages : 56

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Book Description
Housing cycles and their impact on the financial system and the macroeconomy have become the center of attention following the global financial crisis. This paper documents the characteristics of housing cycles in a large set of countries, and examines the determinants of house price movements. Empirical analysis shows that house price dynamics are mostly driven by income and demographics but fluctuations in these fundamentals and credit conditions can create deviations from the implied equilibrium path. We conclude with a discussion of the macroeconomic implications of house price corrections.

Author: Rob Nijskens
Publisher: Springer
ISBN: 3030116743
Category : Business & Economics
Languages : en
Pages : 220

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Book Description
This open access book discusses booming housing markets in cities around the globe, and the resulting challenges for policymakers and central banks. Cities are booming everywhere, leading to a growing demand for urban housing. In many cities this demand is out-pacing supply, which causes house prices to soar and increases the pressure on rental markets. These developments are posing major challenges for policymakers, central banks and other authorities responsible for ensuring financial stability, and economic well-being in general.This volume collects views from high-level policymakers and researchers, providing essential insights into these challenges, their impact on society, the economy and financial stability, and possible policy responses. The respective chapters address issues such as the popularity of cities, the question of a credit-fueled housing bubble, the role of housing supply frictions and potential policy solutions. Given its scope, the book offers a revealing read and valuable guide for everyone involved in practical policymaking for housing markets, mortgage credit and financial stability.