In many countries, house prices are overvalued according to price-to-income ratios. We propose that the borrower s ability to pay through a mortgage is a long-run house price fundamental and find convincing evidence by means of cointegration tests, granger causality, and an elasticity of house...

After a decade under federal control, the Belgian regions became responsible for the mortgage interest and capital deduction (MICD) in 2015. One region drastically reduced the average subsidy while another left it unaffected. Exploiting this variation in a difference in differences design, we...

We study the accuracy of homeowners' self-reported estimates using data from the 2001-2019 American Housing Survey. By comparing homeowners' estimates with deflated transaction prices for the same properties, we find evidence that American homeowners overestimate the value of their homes by 1.3%...