SESSION VI - Macro shocks and housing markets

ABSTRACT: The last two recessions in the United States, associated with the Global Financial Crisis (GFC) and the COVID-19 Pandemic, respectively, caused huge swings in the housing market – but with opposing signs. The GFC was associated with a historic housing collapse, while COVID saw a historic increase in home prices. This occurred despite large scale conventional and unconventional monetary and fiscal stimulus in both episodes. We argue that supply and macro stability conditions contributed substantially to the differential housing market responses.