Housing Affordability: A New Dataset
IMF Working Papers, December 1, 2023
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- Housing Affordability: A New Dataset
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Bibliographic details
- Authors: Nina Biljanovska, Chenxu Fu, Deniz O Igan
- Published: December 1, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400259746.001
Overview and Purpose
- Rapid increase in house prices in the past few years, including during the COVID-19 pandemic, raises concerns about housing affordability.
- The price-to-income ratio is a widely-used indicator of affordability, but does not take into account important factors such as the cost of financing.
- Aim: to construct a measure of housing affordability that takes financing and other factors into account for a large set of countries and long period of time.
Data Coverage and Index Definition
- Dataset covers an unbalanced panel of 40 countries over the period from 1970Q1 to 2021Q4.
- For each country, the index measures the extent to which a median-income household can qualify for a mortgage loan to purchase an average-priced home.
Key Findings and Comparisons
- Constructed indices are compared to other readily-available measures of affordability (for example, the price-to-income ratio) to gauge performance.
- The evolution of the indices over time is examined to understand relevant drivers of housing affordability.
Analysis and Methods
- Regression analysis is used to assess the extent to which government housing programs could contribute to improving affordability.
Subjects and Keywords (as listed)
- Subjects: Expenditure, Financial institutions, Housing, Housing prices, Income, Mortgages, National accounts, Prices
- Keywords: affordability index, Baltics, Eastern Europe, Global, government housing program, household income, Housing, housing affordability, Housing prices, Income, indices in selected country, Mortgages, real estate markets
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- Working Paper