1. Stylized Facts about the Housing Cycle
Econ 332
Spring 2010
© copyright 2010 by Casey B. Mulligan 1

2. Basic Facts About the Housing Cycle: Housing Sector
Housing expenditure share was pretty constant, so far
Rental rates were high, and still are
operating surplus rates were low, and still are
occupancy rates were low, and still are
purchase prices rose more than rents
sources disagree about the amount
challenge of separating housing price from quantity
housing construction boomed, both tenant and o-o
Rates of return probably above normal
short term interest rates were low, but not long term 2

3. Tenant-landlord Hypothetical

15. Basic Facts About the Housing Cycle: Non-Housing Sector
Less construction of non-residential structures
Less investment abroad
Non-housing consumption was high 15

16. Housing Construction & the Current Account, 1994-2006 Source: Gete (2008)16