How Do Interest Rates Spur the Housing Market: Exploring Nonlinear Effects
In this note we examine how monetary policy affects housing demand, supply and prices in Canada, and whether these effects vary with labour market conditions
R - Urbanuralegionaleal Estate, and Transportation Economics
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Channels of Transmission: How Mortgage Rates Affect House Prices and Rents in Canada
We use Canadian data to examine how monetary policy affects house prices and the consumer price index for rent through exogenous changes in the mortgage interest rates. It finds that the price and rent impacts operate through various channels and that these impacts vary by region. -
Housing and the Long-Term Real Effects of Changes in Trend Inflation
An economy with fixed amortization mortgages and borrowing-constrained consumers leads to the level of inflation targeted having real effects on home ownership, consumption, and debt. Using a life-cycle housing tenure choice model, we show that by front-loading real mortgage payments, higher inflation lowers steady-state home ownership and the mortgage-debt-to-income ratio. -
How will mortgage payments change at renewal? An updated analysis
We update an assessment of potential changes in payments that mortgage holders could face at renewal in 2025 and 2026. We use an enhanced dataset (RESL2) that provides a more accurate starting point for mortgage balances. -
Incorporating Trip-Chaining to Measuring Canadians’ Access to Cash
Our paper employs smartphone data to construct an improved cash access metric by accounting for both spatial agglomeration and households’ travel patterns. We find that incorporating trip-chaining into the travel metric could show that travel costs are from 15 to 25% less than not incorporating trip-chaining and that the biggest decrease is driven by rural residents. -
Canadians’ access to cash in 2023
This study updates our measure of Canadians' access to cash through automated banking machines and financial institution branches. We find that in 2023 overall access to cash remains stable, while rural Canadians continue having less access. -
How do Canadians perceive access to cash?
This paper introduces a subjective measure of cash accessibility in Canada, complementing existing distance-based metrics developed by Chen, O’Habib and Xiao (2023). Analyzing data from the 2023 Methods-of-Payment Survey, this study explores how Canadians perceive their ease of accessing cash from automated banking machines (ABMs) and financial institution branches. -
Immigration and US Shelter Prices: The Role of Geographical and Immigrant Heterogeneity
The arrival of immigrants increases demand for housing and puts upward pressure on shelter prices. Using instrumental variables based on the ancestry composition of residents in US counties, we estimate the causal impact of immigration on local shelter prices. -
Monetary Policy and Racial Inequality in Housing Markets: A Study of 140 US Metropolitan Areas
We find that minority households see greater declines in housing returns and entries into homeownership than White households after a tightening of monetary policy. Our findings emphasize the unintended consequences of monetary policy on racial inequality in the housing market. -
Immigration and Provision of Public Goods: Evidence at the Local Level in the U.S.
Using U.S. county-level data from 1990 to 2010, we study the causal impact of immigration on the provision of local public goods. We uncover substantial heterogeneity across immigrants with different skills and immigrants of different generations, which leads to unequal fiscal effects across U.S. counties.