Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265702 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15481
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Existing literature documents that house prices respond to monetary policy surprises with a significant delay, taking years to reach their peak response. We present new evidence of a much faster response. We exploit information contained in listings for the residential properties for sale in the United States between 2001 and 2019 from the CoreLogic Multiple Listing Service Dataset. Using high-frequency measures of monetary policy shocks, we document that a one-standard-deviation contractionary monetary policy surprise lowers housing list prices by 0.2–0.3 percent within two weeks—a magnitude on par with the effect on stock prices. House prices respond stronger to the surprises to future rates as compared to the surprise changes in the federal funds rate. Sale prices are mostly pre-determined by list prices and do not independently respond to monetary policy surprises.
Subjects: 
house prices
monetary policy
transmission of monetary policy
list and sales prices
JEL: 
E52
R21
R31
Document Type: 
Working Paper

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