US Housing Market during COVID-19: Aggregate and Distributional Evidence
IMF Working Papers, September 25, 2020
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- US Housing Market during COVID-19: Aggregate and Distributional Evidence
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Bibliographic details
- Authors: Yunhui Zhao
- Published: September 25, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513557816.001
Methods and scope
- Uses zip code-level data and nonparametric estimation.
- Presents eight stylized facts on the US housing market in the COVID-19 era.
- Author: Yunhui Zhao; Date: September 25, 2020; Pages: 46; Series: Working Paper No. 2020/212; DOI: https://doi.org/10.5089/9781513557816.001
Key aggregate findings
- Growth rate of median housing price during the four months (April-August 2020) since the Federal Reserve’s unprecedented monetary easing has accelerated faster than any four-month period in the lead-up to the 2007-09 global financial crisis.
- The increase in housing demand in response to lower mortgage interest rates displays a structural break since March 2020 (housing demand has increased by much more than before).
- These aggregate results indicate either the existence of “fear of missing out” or COVID-induced fundamental changes in household behavior.
- Developments in housing price, demand, and supply since April 2020 are similar across urban, suburban, and rural areas.
Distributional evidence
- The increase of housing demand appears more pronounced among the two ends of the income distribution:
- Lower end: possibly reflecting relaxed liquidity constraints.
- Higher end: possibly reflecting speculative demand.
Implications and policy observations
- The paper highlights potential unintended consequences of COVID-fighting policies on the housing market.
- Calls for further studies of the driving forces behind the empirical findings.
IMF Working Papers: US Housing Market during COVID-19: Aggregate and Distributional Evidence, Yunhui Zhao, September 25, 2020; Working Paper No. 2020/212; Pages: 46; DOI: https://doi.org/10.5089/9781513557816.001
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- Working Paper