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Local House Price Growth Accelerations

Author

Listed:
  • Alexander N. Bogin

    (Federal Housing Finance Agency)

  • William M. Doerner

    (Federal Housing Finance Agency)

  • William D. Larson

    (Federal Housing Finance Agency)

Abstract

We document real house price growth accelerations in U.S. ZIP codes between 1975 and 2015. Acceleration episodes, which are defined to include relatively extreme periods of price growth, tend to exhibit temporal clustering and occur with greater frequency in large versus small cities. We exploit within-city variation in price dynamics to provide evidence that growth accelerations initially overshoot sustainable price levels but, in some areas, may reflect positive underlying economic fundamentals. Price levels post-acceleration are most sustainable in large cities, especially near city centers. Dynamics are generally consistent with empirical mean-reversion models and theories regarding the effects of traffic congestion and the elasticity of housing supply on house price gradients within the city.

Suggested Citation

  • Alexander N. Bogin & William M. Doerner & William D. Larson, 2016. "Local House Price Growth Accelerations," FHFA Staff Working Papers 16-02, Federal Housing Finance Agency.
    • Handle: RePEc:hfa:wpaper:16-02
    DOI: 10.1007/s11146-017-9643-y
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    Cited by:

    1. Luca Casolaro & Cristina Fabrizi, 2018. "House prices in local markets in Italy: dynamics, levels and the role of urban agglomerations," Questioni di Economia e Finanza (Occasional Papers) 456, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    house price cycles; Great Recession; real estate; boom; bust; house price index;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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