Two recent empirical papers have blamed the Fed for the latest boom and bust in housing. Neither study includes long-term interest rates, which are more affected by global factors than the federal funds rate (FFR). In this paper, I include both the mortgage rate and the FFR as determinants of...

Two recent empirical papers have presented results indicating that the U.S. Federal Reserve deserved much blame as a cause of the latest boom and bust in house prices and activity. Both papers are important contributions, but neither study allows for the impact of long-term interest rates, which...

Given the volatility of home values in recent decades, and the potential impact on the macroeconomy, the ratio of house prices to rents has been employed as an indicator of potential housing market froth. Researchers have attempted to find a stationary relationship between house prices and...