IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v2y1984i6p17-29.html
   My bibliography  Save this article

Disinflation And Housing Investment: A Revisioiiist Analysis

Author

Listed:
  • JOHN A. TUCCILLO

Abstract

The pattern of housing investment through the Seventies was a product of high and variable rates of inflation, a financing system that was segmented from other capital markets and restricted in scope, and a tax system that abetted the demand for housing relative to other investments. In the early Eighties, each of these elements changed. Financial reform brought the housing name system into tune with the rest of the financial sector, and tax cuts increased the demand for forms of investment other than housing. Most important, the rate of inflation slowed dramatically, falling below 4 percent in both 1982 and 1983. The result of all these occurrences was fairly predictable: A decline in the demand for housing as an investment. However, this declining demand has been offset by two factors. The first is the drop in nominal interest rates that accompanied declining inflation. This increased the “affordability” of homing. Second, large numbers of households entered prime home‐buying years and spurred demand for housing as shelter. The current situation is a housing market driven more by consumption demand than by investment demand

Suggested Citation

  • John A. Tuccillo, 1984. "Disinflation And Housing Investment: A Revisioiiist Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 2(6), pages 17-29, May.
    • Handle: RePEc:bla:coecpo:v:2:y:1984:i:6:p:17-29
    DOI: 10.1111/j.1465-7287.1984.tb00781.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.1984.tb00781.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.1984.tb00781.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dougherty, Ann & Van Order, Robert, 1982. "Inflation, Housing Costs, and the Consumer Price Index," American Economic Review, American Economic Association, vol. 72(1), pages 154-164, March.
    2. Patric H. Hendershott, 1980. "Real User Costs and the Demand for Single-Family Housing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(2), pages 401-452.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dirk Kiesewetter & Kristin Schönemann, 2011. "Der Einfluss von Steuern und Subventionen auf die Rendite fremd‐ und selbst genutzter Wohnimmobilien in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(2), pages 104-131, May.
    2. Lawrence B. Smith & Kenneth T. Rosen & Anil Markandya & Pierre-Antoine Ullmo, 1984. "The Demand for Housing, Household Headship Rates, and Household Formation: An International Analysis," Urban Studies, Urban Studies Journal Limited, vol. 21(4), pages 407-414, November.
    3. Haurin, Donald R. & Gill, H. Leroy, 2002. "The Impact of Transaction Costs and the Expected Length of Stay on Homeownership," Journal of Urban Economics, Elsevier, vol. 51(3), pages 563-584, May.
    4. repec:zbw:bofrdp:2022_007 is not listed on IDEAS
    5. Knut Are Aastveit & Bruno Albuquerque & André K. Anundsen, 2023. "Changing Supply Elasticities and Regional Housing Booms," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(7), pages 1749-1783, October.
    6. Frick, Joachim R. & Grabka, Markus M. & Smeeding, Timothy M. & Tsakloglou, Panos, 2010. "Distributional Effects of Imputed Rents in Five European Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(3), pages 167-179.
    7. Hilber, Christian A.L., 2005. "Neighborhood externality risk and the homeownership status of properties," Journal of Urban Economics, Elsevier, vol. 57(2), pages 213-241, March.
    8. James Alm & James R. Follain Jr., 1982. "Alternative Mortgage Instruments: Their Effects On Consumer Housing Choices in an Inflationary Environment," Public Finance Review, , vol. 10(2), pages 134-157, April.
    9. Cecilia Öst, 2012. "Housing and children: simultaneous decisions?—a cohort study of young adults’ housing and family formation decision," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 349-366, January.
    10. Sarah Carrington & Jakob B. Madsen, 2011. "House Prices, Credit and Willingness to Lend," The Economic Record, The Economic Society of Australia, vol. 87(279), pages 537-557, December.
    11. Federica Ciocchetta & Elisa Guglielminetti & Alessandro Mistretta, 2024. "What Drives House Prices in Europe?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 86(5), pages 1089-1121, October.
    12. Aysoy, Cem & Aysoy, Cevriye & Tumen, Semih, 2014. "Quantifying and explaining stickiness in housing rents: A Turkish case study with micro-level data," Journal of Housing Economics, Elsevier, vol. 25(C), pages 62-74.
    13. Juan Carmona & Markus Lampe & Joan Rosés, 2017. "Housing affordability during the urban transition in Spain," Economic History Review, Economic History Society, vol. 70(2), pages 632-658, May.
    14. Cathal Coffey & Kieran McQuinn & Conor O'Toole, 2022. "Rental equivalence, owner‐occupied housing, and inflation measurement: Microlevel evidence from Ireland," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 50(4), pages 990-1021, December.
    15. Joel Slemrod, 1982. "Down-Payment Constraints: Tax Policy Effects in a Growing Economy With Rental and Owner-Occupied Housing," Public Finance Review, , vol. 10(2), pages 193-217, April.
    16. Tracey Seslen & William C. Wheaton & Henry O. Pollakowksi, 2005. "The Investment Performance of Housing and "Hedonic" Spatial Equilibrium," Working Paper 8583, USC Lusk Center for Real Estate.
    17. Patric H. Hendershott & Sheng Hu, 1982. "Accelerating Inflation and Nonassumable Fixed-Rate Mortgages: Effects On Consumer Choice and Welfare," Public Finance Review, , vol. 10(2), pages 158-184, April.
    18. Patrick Bajari & Chenghuan Sean Chu & Minjung Park, 2008. "An Empirical Model of Subprime Mortgage Default From 2000 to 2007," NBER Working Papers 14625, National Bureau of Economic Research, Inc.
    19. Juan Carmona Pidal & Markus Lampe & Joan Ramón Rosés, 2012. "Housing Markets during the Rural-Urban Transition: Evidence from early 20th Century Spain," Working Papers 0030, European Historical Economics Society (EHES).
    20. Veronica John Muellbauer & Veronica David M Williams, 2012. "Credit conditions and the real economy: the elephant in the room," BIS Papers chapters, in: Bank for International Settlements (ed.), Property markets and financial stability, volume 64, pages 95-101, Bank for International Settlements.
    21. Garrido-Yserte, Rubén & Mañas-Alcón, Elena & Gallo-Rivera, Maria Teresa, 2012. "Housing and cost of living: Application to the Spanish regions," Journal of Housing Economics, Elsevier, vol. 21(3), pages 246-255.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:2:y:1984:i:6:p:17-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.