Macroprudential Policy and Housing Market by Shihan Xie

Join us for this weeks Macroeconomics Research Seminar, Summer Term 2023.

Shihan Xie from University of Illinoi, Urbana-Champaign, will present this weeks Macroeconomics seminar.

Abstract

Using a large-scale online survey experiment, we study the effects of changes in three borrower-based macroprudential policy tools, residential loan-to-value (LTV), debt-to-income, and buy-to-let LTV ratio, on British consumers' housing market expectations. A policy loosening generally leads to higher house price expectations, more positive sentiment about housing transactions and stock market investments, improved affordability evaluations, and a reduction in planned non-housing spending (especially for homebuyers and the young), with loosening the residential LTV ratio having the biggest impact. Perceived housing affordability deterioration is associated with perceived accelerating house price growth and increased likelihood of a financial crisis.

This seminar will be held on campus in the Economics Common Room at 4pm on Tuesday 16 May 2023. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.