We review the recent literature on the determinants and effects of housing market
expectations. We begin by providing an overview of existing surveys that elicit housing …

What explains record US house price growth since late 2019? We show that the shift to
remote work explains over one half of the 23.8 percent national house price increase over …

We present the case for the centrality of overreaction in expectations for addressing
important challenges in finance and macroeconomics. First, non-rational expectations by …

To what extent did an expansion and contraction of credit drive the 2000s housing boom
and bust? The existing literature lacks consensus, with findings ranging from credit having …

This paper incorporates diagnostic expectations into a general equilibrium macroeconomic
model with a financial intermediary sector. Diagnostic expectations are a forward-looking …

There are two prevailing theories of borrower default: strategic default—when debt is too
high relative to the value of the house—and adverse life events—such that the monthly …

There are three prevailing theories of mortgage default: strategic default (driven by negative
equity), cash flow default (driven by negative life events), and double-trigger default (where …

We document a new fact: regional divergence, the rate at which rich states grow faster than
poor states, explains most US house price movements since 1939, including the post-2000 …

We study mislearning from equilibrium prices, and contrast this with mislearning from
exogenous fundamentals. We micro-found mislearning from prices with a psychologically …

We study the joint evolution of prices and rents of residential property. After constructing rent
and price indices for renter-and owner-occupied properties, we decompose the change in …