Changing Supply Elasticities and Regional Housing Booms

Knut Are Aastveit, Bruno Albuquerque and André K. Anundsen

Journal of Money, Credit and Banking, 2023, vol. 55, issue 7, 1749-1783

Abstract: Developments in U.S. house prices over the past decade mirror those of the 1996–2006 boom. Construction activity has, however, been weak. Using data for 254 U.S. metropolitan areas, we show that housing supply elasticities have fallen markedly in recent years. We find that housing supply elasticities have declined more in areas in which land‐use regulation has tightened the most, and in areas that experienced the sharpest housing busts. Consistent with the declining housing supply elasticities, we find that monetary policy shocks have had a stronger effect on house prices during the past decade than during the previous boom. At the same time, building permits respond less.

Date: 2023
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https://doi.org/10.1111/jmcb.13009

Related works:
Working Paper: Changing supply elasticities and regional housing booms (2020)
Working Paper: Changing supply elasticities and regional housing booms (2019)
Working Paper: Changing supply elasticities and regional housing booms (2019)
Working Paper: Changing supply elasticities and regional housing booms (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:55:y:2023:i:7:p:1749-1783

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