Clustered housing cycles

Ruben Hernandez-Murillo, Michael Owyang and Margarita Rubio

No 2013-021, Working Papers from Federal Reserve Bank of St. Louis

Abstract: Using a panel of U.S. city-level building permits data, we estimate a Markov-switching model of housing cycles that allows cities to systematically deviate from the national housing cycle. These deviations occur for clusters of cities that experience simultaneous housing contractions. We find that cities do not form housing regions in the traditional geographic sense. Instead, similarities in factors affecting the demand for housing (such as population growth or availability of credit) appear to be more important determinants of cyclical co-movements than similarities in factors affecting the supply for land (such as the availability of developable land or the elasticity of land supply).

Keywords: Business cycles; Housing; Economic indicators (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 R31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013
New Economics Papers: this item is included in nep-mac and nep-ure
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Related works:
Journal Article: Clustered housing cycles (2017)
Working Paper: Clustered Housing Cycles (2015)
Working Paper: Clustered Housing Cycles (2013)
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