Low Interest Rates and Housing Bubbles : Still No Smoking Gun

@inproceedings{Kuttner2012LowIR,
  title={Low Interest Rates and Housing Bubbles : Still No Smoking Gun},
  author={Kenneth N. Kuttner},
  year={2012}
}
  • Kenneth N. Kuttner
  • Published 2012
This paper revisits the relationship between interest rates and house prices. Surveying a number of recent studies and bringing to bear some new evidence on the question, this paper argues that in the data, the impact of interest rates on house prices appears to be quite modest. Specifically, the estimated effects are uniformly smaller than those implied by the conventional user cost theory of house prices, and they are too small to explain the previous decade’s real estate boom in the U.S. and… CONTINUE READING