Essays in Housing Markets

The essays in housing markets contained within this dissertation examine the effect of policy decisions on housing market outcomes in the emerging market context of China and the developed market context of US. Specifically, I estimate the effect of demand- and supply-side quantitative allocation policies on the price elasticity of housing supply and the home price volatility across municipalities in China. At the transaction level, I use Chinese land supply data to examine the substitution of land use types, and present evidence on politically driven land supply decisions that favor industrial land use and specific industries to increase local officials’ promotion probabilities. For the US mortgage market, I leverage a unique dataset from Freddie Mac’s national mortgage lender survey to examine the effect of quantitative easing on mortgage-backed securities pricing and primary mortgage rates. I find that large-scale purchases of mortgage-backed securities by the Federal Reserve is associated with substantial declines in mortgage rates across the country, but local economic and housing conditions are also important contributing factors to cross-sectional dispersion in mortgage rates. The combined results of these essays reveal policy decisions can have significant impact on housing market outcomes and provide directions for future research.