Finance and Economics Discussion Series: The Long-Run Relationship Between House Prices and Rents

by Joshua Gallin

I show that when house prices are high relative to rents (that is, when the rent-price ratio is low) changes in real rents tend to be larger than usual and changes in real prices tend to be smaller than usual. Standard error-correction models provide inconclusive results about the predictive power of the rent-price ratio at a quarterly frequency. I use a long-horizon regression approach to show that the rent-price ratio helps predict changes in real...

• Format: Paperback
• Language: English
• ISBN: 1288712065
• ISBN13: 9781288712069
• Release Date: February 2013
• Publisher: Bibliogov
• Length: 32 Pages
• Weight: 0.17 lbs.
• Dimensions: 0.1" x 7.4" x 9.7"