In this chapter, we review and discuss the large body of research that has developed over the past 10-plus years that explores the interconnection of macroeconomics, finance, and housing. We focus on three major topics—housing and the business cycle, housing and portfolio choice, and housing...

Using aggregate quarterly data for the period 1975q1-2010q4, I find that the US housing market changed from a stable regime with prices determined by fundamentals, to a highly unstable regime at the beginning of the previous decade. My results indicate that these imbalances could have been...

Housing policies in Japan after World War II were focused on the quantitative supply of houses with a wide range of targeted groups and public rental houses. The Japan Housing Corporation (now the Urban Renaissance Agency) and the Government Housing Loan Corporation (now the Japan Housing...

China has weathered the global financial turmoil in much better shape than most other countries, including the United States. However, there been concerns that banks loosened their lending standards too much as a result of a huge stimulus, among other factors. This led to excessive lending to...

In this paper we determine whether speculative bubbles in one region in the US can lead bubbles to form in others. We first apply a regime-switching model to determine whether speculative bubbles existed in the US regional residential real estate markets. Our findings suggest that the housing...

This paper develops a DSGE framework featuring a heterogeneous housing market, endogenousdefault, and a banking sector. We find that the idiosyncratic mortgage risk shock plays an importantrole in explaining the fluctuations of house prices during the mid-1980s and the years leading up tothe...

Using aggregate quarterly data for the period 1975q1–2010q4, I find that the US housing market changed from a stable regime with prices determined by fundamentals, to a highly unstable regime at the beginning of the previous decade. My results indicate that these imbalances could have been...

This paper shows how Poterba, like many others, tries to use a non-existing demand and supply model to explain housing price. Instead, this paper derives the housing demand and supply functions without combining them into one single graph. The ungrouped functions offer clearer picture with...

The main aim of this paper is to identify the underlying reasons for the cyclical nature of the Hungarian housing market, in particular the business cycles, the construction, and market participants' expectations. Our research was conducted based on analysis of statistical data and of the...

Real estate prices more than doubled in many countries of Central and Eastern Europe from 2003 to 2008. In this paper, I provide the first assessment of whether housing prices in this region correspond to rents, i.e. to cash-flows related to an apartment purchase. State-of-the art panel data...