Housing supply plays an important role in the Volatility of macroeconomic cycles and the speed with wl-iich house prices respond to changes in demand, yet it is understudied in the current literature. In this paper we present and estimate a new model of the supply of residential construction that is consistent with the theoretical treatment of land deveiopment and urban growth. The model shows ...

I study the consumption responses of heterogeneous households following changes in both house prices and interest rates. I show the common assumption that household period utility is separable in housing and consumption can be consistent with the observed co-movement between these two series only in the absence of housing transaction costs. When these costs are introduced into dynamic stochasti...

A previous version of the paper has been published as Bank of Finland BOFIT Discussion Paper No. 27-2012. The views expressed in the paper are those of the authors and do not necessarily reflect the views of the Bank of Finland. The recent increase in Chinese house prices has led to concerns that China is vulnerable to asset price shocks. In this paper, we apply recently developed recursive uni...

A recent interest in Real Estate Market research is to investigate whether regional house prices converge in the long run. The argument is based on the idea that through migration and spatial arbitrage, shocks to the house price in one region could ̳ripple out‘ across the whole economy. If the hypothesis is accepted, relative price ratios across regions should show constancy. Although shortrun ...

We draw a distinction between the concepts of purchase affordability (whether a household is able to borrow enough funds to purchase a house) and repayment affordability (the burden imposed on a household of repaying the mortgage). We operationalize this distinction in the context of a new methodology for constructing affordability measures that draws on the value-at-risk concept and takes acco...

We show that easier access to mortgage credit significantly increases house prices by using exogenous changes in the conforming loan limit as an instrument for easier credit supply and cheaper cost of credit. We find that houses that become eligible for financing with a conforming loan show an increase in house value of 1.1 dollars per square foot (for an average price per square foot of 224 do...

The purpose of this research is to analyze the convergence of regional house prices and its complexity in China. In this purpose it used nonlinear time varying factor model. The obtained results have provided evidences for the existence of some degree of segmentation in China’s housing market. By further dynamic analysis of the convergence, we have found that important housing policies from Chi...