Long-Term Growth in Housing Prices and Stock Returns

Henock Louis, Amy X. Sun

Research output: Contribution to journalArticlepeer-review

6 Scopus citations

Abstract

A firm's long-term stock returns are negatively related to past growth in housing prices in the state where the firm is located. The housing price effect is persistent and robust to controlling for the long-term stock return reversal effect, changes in mortgage interest rates across the states, cyclicality in housing prices and overall local economic conditions. There is no evidence that extant asset pricing models can adequately explain the effect. The study discusses potential explanations for, and the implications of, the cross-regional housing price effect.

Original languageEnglish (US)
Pages (from-to)663-708
Number of pages46
JournalReal Estate Economics
Volume41
Issue number3
DOIs
StatePublished - Sep 1 2013

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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