The influence of homeownership on portfolio choice is a complex issue because housing is both an investment good and a consumption good. That said, a deeper analysis of the influence of homeownership is crucial, at least if we consider the recent high fluctuations in the housing market and the substantial increase in mortgage debt both in the US and some European countries.
Does homeownership influence stockholding?
Denis Fougère, Mathilde Poulhès, 1 December 2012
Why is housing such a popular investment? A new psychological explanation
Thomas Alexander Stephens, Jean-Robert Tyran, 23 November 2012
In the wake of the economic crisis that began in 2007, homeowners in many countries have faced substantial losses. Prices have fallen in both nominal and real terms. In the US, for example, house prices in the first quarter of 2012 were down more than 40% in real terms from their peak (Shiller 2012). Nevertheless, housing remains a popular investment1.
On the Chinese house-price bubble
Christian Dreger, Yanqun Zhang, 15 July 2011
For many observers, the Chinese economy has been spurred by a bubble in the real-estate market, probably driven by the fiscal stimulus package and massive credit expansion (Nicolas 2009). For example, the stock of loans increased by more than 50% since the end of 2008.
Low interest rates and housing booms: The role of capital inflows, monetary policy, and financial innovation
Filipa Sá, Pascal Towbin, Tomasz Wieladek, 10 March 2011
The run-up to the recent global financial crisis was characterised by an environment of low interest rates and a rapid increase in housing market activity across OECD countries.
Foreclosures, house prices, and the real economy
Atif Mian, Francesco Trebbi, Amir Sufi, 10 February 2011
How does a negative shock to the economy get amplified into a severe and long-lasting economic slump? The answer may be found in your house. An extensive body of theoretical research shows that the forced sale of durable goods – in many cases a house – can have two undesirable consequences. First, the price of these goods is driven down.
Household debt and macroeconomic fluctuations
Amir Sufi, Atif Mian, 29 April 2010
There once was a decade in US history in which financial innovation led to a sharp rise in the flow of credit to households. Durable goods consumption increased dramatically as household debt climbed to over 100% of GDP.
How well do individuals predict the selling prices of their homes?
Sergi Jiménez-Martín, Hugo Benítez-Silva, Selcuk Eren, Frank Heiland , 30 June 2009
Housing wealth is one of the pillars of the well-being of Americans families, especially because it represents more than 60% of the average net wealth of US households, according to the Federal Reserve's 2004 Survey of Consumer Finances (SCF).
The changing housing cycle and its implications for monetary policy
Tommaso Monacelli, Roberto Cardarelli, Alessandro Rebucci, Luca Sala, 26 April 2008
After several years of rapid price increases, house price growth has decelerated in many advanced economies, and in a few of them – the United Stated and Ireland – house prices have fallen during the past year (Figure 1).
House price bubbles made in Europe
Daniel Gros, 25 October 2007
That house prices can have a profound effect on the economy is by now widely known. In the US, Professor Rober Shiller has for some time already argued that US houses were overvalued. By contrast, the OECD (2005) came to the conclusion that there was no clear-cut evidence of a bubble, at least on the basis of the prices observed then (i.e. 2003/4). However, this discussion seems moot now.
Fallout from the credit crunch
Dennis J Snower, 28 September 2007
For years economists and policy makers have worried about the fragility of the US economy, and particularly about the un-sustainability of the US housing boom, but when the shock finally occurred, everyone – central banks, commercial banks, hedge funds, private investors - appears to have been unprepared. The big surprise was the nature of the shock.
- Fiscal consolidation: At what speed?Blanchard, Leigh
- Public debt and economic growth, one more timePanizza, Presbitero
- Escaping liquidity traps: Lessons from the UK’s 1930s escapeCrafts
- The lessons of the North Atlantic crisis for economic theory and policyStiglitz
- Do entrepreneurs matter?Becker, Hvide
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Reichlin, Baldwin, 14 April 2013
CEPR Policy Research
- Political Credit Cycles: The Case of the Euro ZoneFernández-Villaverde, Garicano, Santos
- Winning by Losing: Incentive Incompatibility in Multiple QualifiersDagaev, Sonin
- Income and schoolingBrückner, Gradstein