American Economic Journal: Macroeconomics
no. 4, October 2022
The responsiveness of house prices to monetary policy shocks depends on the nature of the shock—expansionary versus contractionary—and on local housing supply elasticities. These findings are established using a panel of 263 US metropolitan areas. Expansionary monetary policy shocks have a larger impact on house prices in supply-inelastic areas. Contractionary shocks are orthogonal to housing supply elasticities. In supply-elastic areas, contractionary shocks have a greater impact on house prices than expansionary shocks do. The opposite holds true in supply-inelastic areas. We attribute this to asymmetric housing supply adjustments.
Aastveit, Knut Are, and André K. Anundsen.
"Asymmetric Effects of Monetary Policy in Regional Housing Markets."
American Economic Journal: Macroeconomics,
Business Fluctuations; Cycles
Interest Rates: Determination, Term Structure, and Effects
Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
Housing Supply and Markets