Why Housing?

24 Pages Posted: 22 Aug 2012 Last revised: 17 Jul 2013

Adam J. Levitin

Georgetown University Law Center

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ; University of Pennsylvania - Accounting Department

Date Written: February 14, 2013


Asset bubbles come and go. Only the housing bubble, however, brought the economy to its knees. Why? What makes housing uniquely a cause of macroeconomic risk?

This article examines the workings of the housing market as well as theories and empirical evidence about the housing bubble. It explains why housing is a particular source of macroeconomic risk and how changes in the housing finance channel were the critical element in the formation of the bubble.

Keywords: bubble, mortgage, housing, interest rates, securitization, agency, CDO

JEL Classification: E32, E44, G21, R31

Suggested Citation

Levitin, Adam J. and Wachter, Susan M., Why Housing? (February 14, 2013). Housing Policy Debate, Vol. 23, pp. 5-27 (2013); U of Penn, Inst for Law & Econ Research Paper No. 12-28; Georgetown Law and Economics Research Paper No. 12-035; Georgetown Public Law Research Paper No. 12-127. Available at SSRN: https://ssrn.com/abstract=2114620 or http://dx.doi.org/10.2139/ssrn.2114620

Adam J. Levitin (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Susan M. Wachter

University of Pennsylvania - Wharton School, Department of Real Estate ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6330
United States
215-898-6355 (Phone)

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

HOME PAGE: http://real.wharton.upenn.edu/~wachter/index.html

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