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Housing Dynamics without Homeowners. The Role of I

Author

Listed:
  • Carlos Garriga

    (Federal Reserve Bank of St. Louis)

  • Athena Tsouderou

    (IE Business School)

  • Pedro Gete

    (IE Business School)

Abstract

This paper documents the arrival of institutional investors in the U.S. housing market and studies their dynamic real effects. Using an instrumental variable approach we show that investors initially caused increases in housing prices and rents, mostly in bottom tier and single-family segments of the market. Investors brought liquidity and stimulated construction causing decreases in prices and rents over time. Thus, investors initially lowered housing affordability to later increase it. We also uncover a new fact post-financial crisis: housing prices have decoupled from homeownership in most MSAs in the U.S., as in many advanced economies. The presence of investors decouples housing dynamics from homeownership.

Suggested Citation

  • Carlos Garriga & Athena Tsouderou & Pedro Gete, 2019. "Housing Dynamics without Homeowners. The Role of I," 2019 Meeting Papers 1407, Society for Economic Dynamics.
  • Handle: RePEc:red:sed019:1407
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    References listed on IDEAS

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