What Drives the Owner‐Occupied and Rental Housing Markets? Evidence from an Estimated DSGE Model

Abstract

Most dynamic stochastic general equilibrium (DSGE) models with a housing market do not explicitly include a rental market and assume a tight mapping between house prices and rents over the business cycle. However, rents are much smoother than house prices in the data. We match this feature of the data by adding both an owner‐occupied housing market and a rental market in a standard DSGE model. The intertemporal preference shock accounts for more than half of the variation in house prices and contributes to residential investment fluctuations through the liquidity constraint, and nominal rigidity in rental contracts captures the variation in the price‐rent ratio.

Does Tourism Contribute to Real Estate Boom? A DSGE Modeling in Small Open Economy

“…Others seem to think that the DSGE framework should be revised to better account for financial frictions, in particular, the housing market dynamics ( Iacoviello, 2005 ; Iacoviello & Neri, 2010 ). Sun and Tsang (2017) construct a DSGE model that features both an owner-occupied housing market and a rental housing market to account for the volatility of U.S. price–rent ratio over time. Even though the DSGE framework has been comprehensively explored for studying macroeconomic dynamics and analyzing quantitative policy issues, the application of DSGE models in the tourism field is still profoundly underdeveloped.…”

“…Based on Sun and Tsang (2017) and Zhang and Yang (2018) , we construct a small open economy DSGE model that features tourism good sector and housing market. There are two types of final goods: tourism good , and a manufacturing good, .…”

Multiattribute Supply and Demand Matching Decision Model for Online-Listed Rental Housing: An Empirical Study Based on Shanghai

“…50×50 of the landlords and tenants, respectively, were calculated using equations (11) and (12). e landlords' perceived utility matrices Tables 16 and 17.…”

“…e satisfaction of the two parties needs to effectively characterize the psychological perception of both parties. Moreover, in the process of matching ORH SAD, both sides will consider the multiattribute information of housing [12], but there are very few studies covering the multiattribute two-sided matching model. erefore, this paper proposes a multiattribute supply-demand matching method for online rental listings based on the perceived utility.…”

“…ere are also models to establish a double-sided matching theory to solve the problem of public rental housing [11]. At the same time, some scholars pointed out that SAD patterns consider various housing attributes in the house matching selection process [12,13] and that these attributes affect ORH SAD matching [14]. For example, price floors play a central role between SAD [15], while issues around house matching and comfort, transportation, the surrounding environment, and landlord services are specific indicators of tenant concerns [16].…”