Housing markets experience substantial price volatility, short-term price change momentum, and mean reversion of prices … particularly common rationalization for price booms, but temporary periods of low interest rates will not explain massive price …

interest rates rarely seem to drive price growth; under-priced default options are a more common contributor to high prices …

interest rates rarely seem to drive price growth; under-priced default options are a more common contributor to high prices …

smaller price increases. However, the welfare consequences of bubbles may actually be higher in more elastic places because … those places will overbuild more in response to a bubble. The data show that the price run-ups of the 1980s were almost … building during that period. Over the past five years, a modest number of more elastic places also experienced large price …