Housing Wealth Effects: Housing's Impact on Wealth Accumulation, Wealth Distribution and Consumer Spending
by Eric Belsky, Joint Center for Housing Studies of Harvard University and Joel Prakken, Macroeconomic Advisers, LLC.
November 2004
This report concludes that consumers more quickly spend a portion of their increased housing wealth than their stock wealth. A one-dollar increase in housing wealth or stock wealth each lead to a long-run increase in consumer spending of about 5.5 cents. |  |
Eighty percent of the effect of housing wealth on consumer spending -- about 4.5 cents -- occurs within one year while it takes several years for stocks to have the same effect on consumer spending.
Full Report (608K pdf) | News Release
Real Estate Versus Financial Wealth in Consumption
by John D. Benjamin and Peter Chinloy, American University, and G. Donald Jud, University of North Carolina, Greensboro
March 2003
This study estimates the impact of changes in financial and housing wealth on the levels of consumer spending and whether housing wealth impacts consumer spending to a larger degree than a change in overall financial wealth.
Research Brief (942K pdf) | Executive Summary (537K pdf) | Full Report (642K pdf)
Housing: An Investment and a Piggybank for Spending
by John D. Benjamin and Peter Chinloy, American University
December 2003
The assets of most households are in a home or restricted retirement account such as a 401(k). Only the wealthiest households allocate a significant share of their assets to unrestricted financial accounts. Because housing and retirement accounts are illiquid, households can, however, borrow against the value of their home through a mortgage or line of credit to finance consumption.
Research Brief (563k PDF) | Executive Summary (239k PDF) | Full Report (361K PDF)
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