Interest Rates and Real Estate Values : The Diverging Effects of Real Rates and Expected Inflation By

Abstract

Higher interest rates are commonly believed to reduce real estate values, but corroborating evidence is underwhelming. There is a sensible theoretical explanation, which also suggests heterogeneity across countries. In the United States, but not in Canada, nominal interest on residential housing mortgages is a deductible expense for the personal income tax… (More)

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