Owner-occupied Housing Market Research Articles

Mobility Constraints and Cycles in the Owner Occupied Housing Market

ABSTRACT Very little empirical attention has been given to the mobility constraints linked to accessibility to and upgrading within home ownership. Both are central to the operation of the housing market and can be seen within a framework of housing careers. This paper places them also in the context of changing housing market conditions and in particular the role of housing cycles. The research simulates, in purely financial terms, the behaviour of the average first-time buyers in each region of the UK over three decades. The analysis finds the accessibility mobility constraint is more psychological than financial but is also dependent on interest rates and the scale and duration of market downturns. The analysis of the upgrading constraint through housing cycles demonstrates that the ease of moving in the upturn fuels a boom but the subsequent inabilities to accumulate the capital necessary for such a move brings a long muted recovery.

Reactie op Buy-to-let gewikt en gewogen

The Socialist Party commissioned this academic study into the scale and impact of the recent rise of buy-to-let transactions in Dutch urban housing markets. The study focusses, however, on the rise of private rental housing. This definition of buy-to-let is challenged in this review, as is the impact of the recent rise of buy-to-let on the Dutch owner occupied housing market.

Housing search and housing choice in urban China

This paper reports an investigation of homebuyers and the influence of local social capital (LSC) on their housing decisions. We adopt a housing search model and predict the following two effects of LSC: a homebuyer with more social capital in a given location will have a higher propensity to relocate in that location and will be able to secure a housing transaction at a more favourable price in that location. Using data from the owner-occupied housing market in Tianjin, China, we find that LSC tends to inhibit homebuyers from moving far from their original neighbourhoods. LSC also helps homebuyers purchase their housing units at an average price that is 7% lower than the prices paid by those with less LSC when relocating within their original neighbourhoods and 3% lower if they relocate outside of their original neighbourhoods but within the same general location.

What Drives the Owner-Occupied and Rental Housing Markets? Evidence from an Estimated DSGE Model

Most DSGE models with a housing market do not explicitly include a rental market and assume a tight mapping between house prices and rents over the business cycle. However, rents are much smoother than house prices in the data. We match this feature of the data by adding both an owner-occupied housing market and a rental market with nominal rigidity in a standard DSGE model. The housing preference shock explains 35% of the variation in rents but does not contribute much to the dynamics of house prices. The intertemporal preference shock accounts for more than half of the variation in house prices and contributes significantly to residential investment fluctuations through the liquidity constraint. The monetary policy shock explains little of the fluctuations in the price-rent ratio. Nominal rigidity in rental contracts plays an important role in capturing the smoothness of rents and the large variation in the price-rent ratio.

The “squeezed middle” on the Dutch housing market: how and where is it to be found?

New regulations on the allocation of social housing recently came into effect in the Netherlands as a result of a state-support complaint filed by institutional investors to the European Commission. At least 90 % of vacant social housing dwellings has to be allocated to households with a yearly income of less than €34,000. This has caused concerns about the availability of housing among (lower-)middle-income households. They can no longer access social housing, and due to the prevalence of social housing and the fiscal favoring of owner-occupied housing, the affordable private rented sector is almost absent in the Netherlands. Thus, currently they rely on the owner-occupied housing market with their restricted financial budgets and might lose out. This study substantiates this assumed “squeezed middle” problem with empirical data for housing regions in the Netherlands. The adopted spatial analysis method shows to what extent and where lower-middle-income households have access to homeownership in the Netherlands, and how the “squeezed middle” varies among the Dutch regional housing markets. The spatial analysis indicates that in some regions, there indeed is a group of middle-income households that is “squeezed.” Yet, the study also reveals that the problem might be more qualitative than quantitative in nature: households may not be able or willing to trade-off location for access to more affordable or more appropriate housing.

Agent-based Housing Market Microsimulation for Integrated Land Use, Transportation, Environment Model System

The Housing Market Evolutionary System (HoMES) is the updated housing market module for the Integrated Land Use, Transportation, Environment (ILUTE) model system. HoMES is a disaggregate, agent-based microsimulation of the owner-occupied housing market, with models for households’ residential mobility decisions, location choices and valuations, the endogenous supply of housing by type and location, and the endogenous determination of sale prices and rents. The new model offers significant improvements over previous attempts by including a reformulated market clearing mechanism, market dependency on macro-economic conditions, and improved computational performance. A 100% synthesized population is validated against historical data for the Greater Toronto-Hamilton Area.

Public mortgage guarantee: instrument to cope with impacts of the financial crisis on the owner-occupied housing market evidence from the Netherlands

The global credit crunch had a deep impact on the mortgage markets in Europe, including the Netherlands. When the credit crunch transformed into a debt crisis, this impact deepened. The impact of the credit crunch and the debt crisis (together: the global financial crisis) on the Dutch housing market is described here. The Dutch government started to react with a stimulating policy but since 2010 austerity measures have become dominant. The National Mortgage Guarantee (NHG) has been applied as an instrument to shelter home-owners against the hardship of the financial crisis. In this paper the role of National Mortgage Guarantee in the Netherlands is analysed. Particular emphasis is placed on the role of this guarantee as an instrument to cope with the impact of the financial crisis on the national owner-occupied housing market. The performance of NHG in 2010 is elaborated. The conclusion is that NHG has made the Dutch owner-occupied housing sector more resilient during the financial crisis.

Towards integrated land use and transportation: A dynamic disequilibrium based microsimulation framework for built space markets

Investigating the factors and processes that influence the spatiotemporal distribution of built space and population in an urban area, plays an extremely important role in our greater understanding of the urban travel behaviour. Existing location of activity centres, especially home and work, strongly influences the short-term individual-level decisions such as mode of transportation, and long-term household-level decisions such as change in job and residential location. Conditions in the built space market also affect households’ and firms’ location and relocation decisions, and hence influence the general travel patterns in an urban area. In this context, this paper addresses a very important, but at the same time, not very widely investigated dimension that plays a key role in the evolution of built space and population distribution: Market. A disequilibrium based microsimulation modelling framework is developed for the built space markets. This framework is then used to operationalize the Greater Toronto and Hamilton Area’s owner-occupied housing market within Integrated Land Use Transportation and Environment (ILUTE) modelling system. Simulation results captured heterogeneity in the transaction prices, due to type of dwellings and different market conditions, in a very disaggregate fashion. The proposed methodology is validated by running the simulation from 1986 to 2006 and comparing the results with the historic data.

House Purchase Versus Rental in Spain

One of the most salient feature of the Spanish housing market, compared to other European economies, is its relatively low rental share. This may be partly attributed to the existence of fiscal distortions in Spain favoring ownership. In this paper, we simulate the potential efects of different policy measures aimed at homogenizing the fiscal treatment of ownership and renting and improving the efficiency of the rental market. We do so in the context of a DSGE model featuring a market for owner-occupied and rented housing, as well as collateral constraints in loan markets. We find that eliminating the existing subsidy to house purchases, introducing a comparable subsidy to rental payments or increasing the efficiency in the production of housing rental services raise the rental share by a similar amount. However, their implications in terms of the construction sector differ.

The Relationship between Residential Foreclosures, Race, Ethnicity, and Nativity Status

Existing research indicates that minority homeowners are more likely to experience a foreclosure than a white borrower, but despite the importance of immigrants to the owner-occupied housing market, no research has examined the relationship between nativity status and foreclosure. Using a unique data set and binomial logistic regression models, this article examines the relationship between race, ethnicity, nativity status, and foreclosure for a sample of households in Minneapolis, Minnesota. Research results indicate that the relationship between nativity status and foreclosure differs by the race and ethnicity of the household and whether the mortgage was refinanced or for a home purchase.

MARRIED WOMEN'S EMPLOYMENT STATUS AND THE ACQUISITION OF FAMILY-OWNED HOUSING

This paper explores the impact of married women's employment status on acquiring family-owned housing. In postwar Japan, as well as in many other societies, home ownership has been strongly linked with the male breadwinner family model. Over the past two decades, however, Japan has undergone a prolonged period of economic decline, leading to a decrease in male breadwinners with stable incomes and a counter increase in wives participating in the labour market. Consequently, wives' employment status has become more definitive in stratifying family households in terms of entering the owner-occupied housing market.

Efficiency and Seasonality in the UK Housing Market, 1991–2001*

AbstractThis paper considers the informational efficiency of the UK owner‐occupied housing market over the period 1991–2001. Original small‐area, monthly, quality‐adjusted house price index series are developed from raw housing transaction observations for a number of UK counties and cities. These series are then tested in an autoregressive setting for characteristics indicative of weak market efficiency and seasonality. The major conclusion drawn is that there exists little evidence to support notions of inefficiency in these markets over the period considered.

Housing-market disequilibrium: an examination of housing-market price and stock dynamics 1967–1998

Recent research has recognized that the market for owner-occupied housing is often inefficient and adjusts slowly to changes in market conditions. This paper develops a disequilibrium housing-market model that separates disequilibrium generated by supply-side disturbances from those arising from demand disturbances. I apply the model to the US housing market for the period 1967–1998. Although price changes guide the market toward a new equilibrium, inefficiencies impede market clearing. Thus, the market is characterized by sustained periods of disequilibrium.

Labour-Market Insecurity and Risk in the Owner-Occupied Housing Market

The author explores the extent to which labour-market insecurity affects behaviour in the owner-occupied housing market. Drawing on related qualitative and quantitative survey evidence, the author first argues that owner-occupiers have experienced and also perceive considerable labour-market insecurity. However, analysis of the large-scale survey suggests only weak linkages between indicators of insecurity and the choices that owners make in the housing market. This apparent inconsistency is explored with the aid of the qualitative data which suggest that perception of insecurity and attitude to risk intersect to create strategies that may not bear any direct connection to measurable and objective labour-market characteristics or risks. The author concludes by arguing that this evidence suggests that the current policy aim of leaving owners to insure themselves against labour-market risk will leave some owners unprotected, and that this gap is likely to persist in the long term.

The Effects of the Flat Tax Reform Proposal an the U.S. Housing Market

This paper analyzes the effects of the Armey-Shelby tax reform proposal among the flat tax proposals on new owner-occupied housing market in USA on the basis of partial equilibrium. The effects in the short- and long-run are examined based on the Kenneth T. Rosen's regression result focusing on the effects of the user costs on home ownership. The Armey-Shelby plan would cause housing price in the short run to decrease with unchanged quantity because of nondeductibility of mortgage interest and property tax payments in the short-run. But the plan would cause housing market in the long run to be more activated, that is, increase in housing quantity and decrease in housing price, through lower interest rate caused by untaxed savings and investments that mean tax neutrality against savings and investments.

Chain-formation in the Owner-Occupied Housing Market

Chain-formation in the Owner-Occupied Housing Market

Chain‐formation in the Owner‐Occupied Housing Market

The paper examines the process by which owner-occupied housing market transactions take place. The objective is to develop a model which can reproduce the slow build-up of housing chains of connected owner-occupier sales and purchases. The approach here applies stringent discontinuous preferences over house type and location to develop a computer model which will produce these housing chains. The process derived demonstrates that existing owner-occupiers spend longer in housing market search than will first-time buyers or the sellers of new dwellings. The implication that existing owner-occupiers ‘lag’ in the housing market is tested on UK housing price data, with results that clearly support this general hypothesis.

Constructing Indices of the Price of Multifamily Properties Using the 1991 Residential Finance Survey

Indices of the price of constant-quality, owner-occupied single-family housing are widely available and have been instrumental in learning about the operations of the market for owner-occupied housing. Such is not the case for multifamily rental housing. The purpose of this article is to provide information about movements in the price of multifamily properties during the 1980s and early 1990s using the 1991 Residential Finance Survey (RFS). Several conclusions are drawn from the development and analysis of indices of the price of multifamily housing for the nation and four large states (California, Florida, New York, and Texas). First, indices for the period 1983--1991 generate similar patterns among the various methods employed; furthermore, movements in the index during the period 1983--1991 seem reasonable. Second, much regional variation exists. Prices in Texas were particularly hard hit, falling by over 25% in nominal terms between 1983 and 1991. Third, the impact of the Tax Reform Act of 1986 does not appear to have been as dramatic as some have suggested. Indeed, price declines do not show up in either the 1986 or 1987 indices for the nation, California, or New York.

Incorporating the Number of Existing Home Sales into a Structural Model of the Market for Owner-Occupied Housing

The principal purpose of this paper is to develop and estimate a structural model of the housing market. The structural model presented is like many previously presented models of the housing market. It contains a demand equation, a supply equation, and an equation to explain the number of homeowner households. Its principal distinguishing feature is the incorporation of the rate of housing sales. This is done by adding a fourth equation to the model that explains the rate of housing sales (or turnover rate) and by including the turnover rate in the supply equation. Housing sales are measured using the National Association of Realtors Existing Homes Sales Survey; the rate of sales is found to be negatively related to the level of housing prices. This particular result is in disagreement with several recent papers that find a positive relationship between housing sales and housing prices. As we argue in the paper, the result is consistent with a lessening in the importance of downpayment and liquidity constraints in the housing decisions of households in the late 1980s and 1990s. Other important results include: (1) the number of home owners is determined in large part by the size of the population of the metropolitan area; (2) the price elasticity of supply is quite large; (3) the demand for housing per household performs reasonably well; and (4) the reduced form equations seem reasonable.

Mismatch in the Housing Market

An economic model is presented of the rise of mortgage arrears and possessions. This indicates that the normal level of possessions is around 30 000 dwellings per year, but that between 1990 and 1996 an additional 300 000 households will exit the owner-occupied housing market. This short-term but substantial outflow from the owner-occupied housing market is producing a mismatch between empty dwellings remaining unsold and growing queues for accommodation from local authorities and housing associations. It is argued that this mismatch is economically inefficient and that it can be addressed through an increase in government expenditure to facilitate the transfer of dwellings out of the owner-occupied housing market.