Full Citation

Title: The Cross-Section of Expected Housing Returns

Citation Type: Working Paper

Publication Year: 2019

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ISSN: 1556-5068

DOI: 10.2139/ssrn.3312391

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Abstract: While homeownership provides consumption benefits to owner-occupiers, residential real estate is also risky. This paper documents evidence that homeowners are compensated for bearing housing risk. Our sample includes monthly zip code-level housing returns in more than 9,000 zip codes across 135 metropolitan statistical areas (MSAs), representing almost 80% of U.S. population. We find that in more than 70% of the MSAs, at least one source of risk carries a significant positive price of risk. The types of risk that are priced are mostly local; MSA-specific housing risk and idiosyncratic housing risk are the two most important risk factors. Our results indicate that housing returns display investment-good properties, even for individual owner-occupiers.

Url: https://poseidon01.ssrn.com/delivery.php?ID=6431181140820910920000030910750820300030310380230060820270940251190860650900651180000370490570990170290050800980730801130880221140530030330580691120250870981151061200590070071220960830010931241171030961130840861

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Authors: Eiling, Esther; Giambona, Erasmo; Lopez Aliouchkin, Ricardo; Tuijp, Patrick

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Data Collections: IPUMS USA

Topics: Housing and Segregation

Countries: United States