House prices and fundamental value
This Economic Letter describes one of the measures commonly used to gauge the fundamental value of housing—the price-rent ratio. We describe the kinds of forces that cause the ratio to move over time and document which forces appear to be most important. We document the way that the housing market typically adjusts to changes in economic fundamentals.
Volume (Year): (2004)
Issue (Month): oct1 ()
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References listed on IDEAS
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- Robert J. Shiller & John Y. Campbell, 1986.
"The Dividend-Price Ratio and Expectations of Future Dividends and Discount Factors,"
Cowles Foundation Discussion Papers
812, Cowles Foundation for Research in Economics, Yale University.
- John Y. Campbell, Robert J. Shiller, 1988. "The Dividend-Price Ratio and Expectations of Future Dividends and Discount Factors," Review of Financial Studies, Society for Financial Studies, vol. 1(3), pages 195-228.
- John Y. Campbell & Robert J. Shiller, 1986. "The Dividend-Price Ratio and Expectations of Future Dividends and Discount Factors," NBER Working Papers 2100, National Bureau of Economic Research, Inc.
- Cochrane, John H, 1992.
"Explaining the Variance of Price-Dividend Ratios,"
Review of Financial Studies,
Society for Financial Studies, vol. 5(2), pages 243-280.
- Jonathan McCarthy & Richard Peach, 2004. "Are home prices the next "bubble"?," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-17.