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dc.contributor.authorHimmelberg, Charlesen_US
dc.contributor.authorMayer, Christopheren_US
dc.contributor.authorSinai, Todden_US
dc.date.accessioned2012-08-17T14:28:59Z-
dc.date.available2012-08-17T14:28:59Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/60694-
dc.description.abstractWe construct measures of the annual cost of single-family housing for 46 metropolitan areas in the United States over the last 25 years and compare them with local rents and incomes as a way of judging the level of housing prices. Conventional metrics like the growth rate of house prices, the price-to-rent ratio, and the price-to-income ratio can be misleading because they fail to account both for the time series pattern of real long-term interest rates and predictable differences in the long-run growth rates of house prices across local markets. These factors are especially important in recent years because house prices are theoretically more sensitive to interest rates when rates are already low, and more sensitive still in those cities where the long-run rate of house price growth is high. During the 1980s, our measures show that houses looked most overvalued in many of the same cities that subsequently experienced the largest house price declines. We find that from the trough of 1995 to 2004, the cost of owning rose somewhat relative to the cost of renting, but not, in most cities, to levels that made houses look overvalued.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 218en_US
dc.subject.jelR21en_US
dc.subject.jelR31en_US
dc.subject.jelG10en_US
dc.subject.ddc330en_US
dc.subject.keywordhousing prices, housing rents, user costs, fundamentals, bubblesen_US
dc.subject.stwImmobilienpreisen_US
dc.subject.stwBubblesen_US
dc.subject.stwGroßstadten_US
dc.subject.stwSchätzungen_US
dc.subject.stwUSAen_US
dc.titleAssessing high house prices: Bubbles, fundamentals, and misperceptionsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn500370982en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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