Monetary policy may have counterintuitive housing price effects – research

Researchers from the Dallas Fed say indirect effects may undercut policy’s aims


Monetary policy’s effects on US housing prices are ambiguous and may be counterintuitive, research published by the Federal Reserve Bank of Dallas argues.

Easy monetary policy tends to make mortgage rates fall which causes housing demand to rise, Alexander Richter and Xiaoqing Zhou say. Higher demand then in turn raises housing prices.

The authors say the direct effect monetary policy has on housing prices could be less impactful than the described indirect effect.

“These opposing channels imply

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