House prices and rents in the 21st century

Lara Loewenstein and Paul S. Willen

We study the joint evolution of prices and rents of residential property. After constructing rent and price indices for renter- and owner-occupied properties, we decompose the change in the price of occupant-owned property into (1) changes in rent, (2) changes in the relative prices of investor- and occupant-owned properties, and (3) changes in the price-rent ratio. Via a simple model, we link our decomposition to different sources of variation in house prices. We argue that while the 2000s boom was plausibly driven by exuberant expectations, the boom of the 2020s more likely resulted from a preference shock.

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Year of publication:	[2023] ; This version: February 2023
Authors:	Loewenstein, Lara ; Willen, Paul
Publisher:	[Boston] : [Federal Reserve Bank of Boston]
Subject:	house price overvaluation \| rent-price ratio \| credit shocks \| housing bubbles \| Wohnimmobilien \| Residential real estate \| Immobilienmarkt \| Real estate market \| Miete \| Rent \| Immobilienpreis \| Real estate price \| Spekulationsblase \| Bubbles \| USA \| United States

Extent:	1 Online-Ressource (circa 30 Seiten) Illustrationen
Series:	Working papers / Federal Reserve Bank of Boston. - Boston, Mass. : [Verlag nicht ermittelbar], ZDB-ID 2180749-8. - Vol. no. 23, 2
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10.29412/res.wp.2023.02 [DOI] hdl:10419/280846 [Handle]
Classification:	R30 - Real Estate Markets, Spatial Production Analysis, and Firm Location. General ; R31 - Housing Supply and Markets ; E30 - Prices, Business Fluctuations, and Cycles. General ; E32 - Business Fluctuations; Cycles ; H31 - Household
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014245238