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Risk and return in the single-family housing market

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  • Theodore M. Crone
  • Richard Voith

Abstract

The tradeoff between risk and return in equity markets is well established. This paper examines the existence of the same tradeoff in the single-family housing market. For home buyers, who constitute about two-thirds of U.S. households, the choice about how much housing and which house to buy is a joint consumption/investment decision. Does this consumption/investment link negate the risk/return tradeoff within the single-family hosuing market? Theory suggests the link still holds. This paper supplies empirical evidence in support of that theoretical result.

Suggested Citation

  • Theodore M. Crone & Richard Voith, 1996. "Risk and return in the single-family housing market," Working Papers 96-16, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:96-16
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    References listed on IDEAS

    as
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    Keywords

    Housing; Regional economics;

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