The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Residential Real Estate and Finance

  • Peter Englund
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2076

Abstract

Residential real estate is a major asset for most households. This article focuses on three issues relating to housing as an investment. (a) Are returns to housing investment predictable? (b) What is the optimal fraction of real estate in an investment portfolio? (c) How important are borrowing constraints, and how do they influence housing prices? It concludes that housing risks are difficult to hedge in practice and that developing suitable derivative markets would fulfil an important function.

Keywords

Asset pricing Case–Shiller indexes Hedonic indexes Household portfolios Housing and mortgage markets Options Overlapping generations Portfolio analysis Residential real estate and finance Tenure choice 

JEL Classifications

R39 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Peter Englund
    • 1
  1. 1.