Understanding Housing Market Boom During COVID-19: Distributional Effect on Housing Demand Among Income Groups Pubblico
Tang, Yinuo (Spring 2022)
Published
Abstract
Exploiting ZIP-by-month variation, this paper examines the distributional effect of the COVID-19 pandemic on housing demand across income groups. First, we document heterogeneous demand responses to pandemic shocks. We show a large increase in demand growth rate from high-income ZIP-codes during the first six months of the pandemic. The result holds true after controlling for the housing supply effect, the state-level effect, and the county-level effect. Second, we develop within-group models testing the effects of two speculation channels. We find little evidence that the strong demand response in high-income ZIP-codes is driven by fast-growing housing prices; instead, we estimate that the ultra-low mortgage rates play an important role. With prolonged pre-pandemic and post-pandemic coverage, this paper sheds light on the implications for the evolution of wealth inequality in the United States.
Table of Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . 1
2 Data, Summary Statistics, and Methodologies . . .. . . . .. . . . .. . . . .. . . . . 4
2.1 Data Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 5
2.2 Variables, Analysis Samples, and Summary Statistics . . . . . . . . . . . . . 7
2.2.1 Key Variables Specification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2.2 Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 8
2.3 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3 Heterogeneous Demand Responses by Income . . . . . . . . . . . . . . . . . . . . . 12
3.1 Distributional Pattern of Housing Demand . . . . . . . . . . .. .. . . . . . . . . . . 12
3.1.1 Baseline Model Results . . . . . . . . . . . . . . . .. . .. . .. . .. . .. . .. . . . . . . . . . . . 12
3.1.2 Accounting for Housing Supply & Housing Price . . . . . .. . .. . . . . . . . 13
3.2 Robustness Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2.1 Accounting for State-level Effect . . . . . . . . . . . . . . . . . . .. . . .. . . .. . . . . .17
3.2.2 Accounting for County-level Effect . . . . . . . . . . . . . . . . . . . .. . . .. . . .. . . 18
3.3 Results Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . .. . . .. . . .. . 20
4 Roles of Housing Prices and Mortgages Rates . . . .. . . .. . . .. . . .. . . .. . . .. .20
4.1 The Effect of Housing Price on Housing Demand . . . . . . . . . . . .. . . . . . .20
4.2 The Effect of Mortgages Rates on Housing Demand . . . . . . . . . . . .. . . . .22
5 Conclusion . . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . . . .. . . .. . . .. . . .. . . .. . . 25
6 Appendix: Figures & Tables .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . . 28
About this Honors Thesis
School | |
---|---|
Department | |
Degree | |
Submission | |
Language |
|
Research Field | |
Parola chiave | |
Committee Chair / Thesis Advisor | |
Committee Members |
Primary PDF
Thumbnail | Title | Date Uploaded | Actions |
---|---|---|---|
|
Understanding Housing Market Boom During COVID-19: Distributional Effect on Housing Demand Among Income Groups () | 2022-04-12 23:32:06 -0400 |
|
Supplemental Files
Thumbnail | Title | Date Uploaded | Actions |
---|