This chapter surveys the literature on housing in macroeconomics. We first collect facts on house prices and quantities in both the time series and the cross section of households and housing markets. We then present a theoretical model of frictional housing markets with heterogeneous agents...

Tests of the dividend pricing hypothesis (DPH) applied to housing have studied the trade-off between the capitalization rate (CAP rate) and subsequent house price appreciation. Even allowing for the fact that actual appreciation does not equal expected appreciation, evidence for the DPH is not...