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Demographics, house prices and mortgage design

Author

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  • Miles, David

    (Monetary Policy Committee Unit, Bank of England)

Abstract

This paper develops a model of the housing market that takes account of population density to assess the impact of population changes on the value and size of the housing stock. The model implies that if population density is on an upward trajectory, rises in population and in incomes increasingly generate price responses and diminishing rises in the stock of housing. This has implications for the optimal structure of housing finance. It amkes equity financing of home purchase more desirable. The properties of hybrid debt-equity contracts for financing house purchase are explored.

Suggested Citation

  • Miles, David, 2012. "Demographics, house prices and mortgage design," Discussion Papers 35, Monetary Policy Committee Unit, Bank of England.
    • Handle: RePEc:mpc:wpaper:0035
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/external-mpc-discussion-paper/2012/demographics-house-prices-and-mortgage-design
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    Citations

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    Cited by:

    1. P. Arestis & A.R. Gonz�lez, 2014. "Modelling the housing market in OECD countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(2), pages 131-153, March.
    2. Alla Koblyakova & Michael White, 2017. "Supply driven mortgage choice," Urban Studies, Urban Studies Journal Limited, vol. 54(5), pages 1194-1210, April.
    3. Christos S. Savva & Nektarios A. Michail, 2017. "Modelling house price volatility states in Cyprus with switching ARCH models," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 11(1), pages 69-82, June.
    4. Apergis, Nicholas, 2019. "The impact of fracking activities on Oklahoma's housing prices: A panel cointegration analysis," Energy Policy, Elsevier, vol. 128(C), pages 94-101.

    More about this item

    Keywords

    demographics; house prices; mortgage design; population density; housing; debt-equity; equity financing;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis

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