Stimulating Housing Markets

Journal Article (Journal Article)

We study temporary fiscal stimulus designed to support distressed housing markets by inducing demand from buyers in the private market. Using difference-in-differences and regression kink research designs, we find that the First-Time Homebuyer Credit increased home sales by 490,000 (9.8%), median home prices by $2,400 (1.1%) per standard deviation increase in program exposure, and the transition rate into homeownership by 53%. The policy response did not reverse immediately. Instead, demand comes from several years in the future: induced buyers were three years younger in 2009 than typical first-time buyers. The program's market-stabilizing benefits likely exceeded its direct stimulus effects.

Full Text

Duke Authors

Cited Authors

  • Berger, D; Turner, N; Zwick, E

Published Date

  • February 1, 2020

Published In

Volume / Issue

  • 75 / 1

Start / End Page

  • 277 - 321

Electronic International Standard Serial Number (EISSN)

  • 1540-6261

International Standard Serial Number (ISSN)

  • 0022-1082

Digital Object Identifier (DOI)

  • 10.1111/jofi.12847

Citation Source

  • Scopus