This paper is an empirical study of the relationship between inflation expectations and the demand for housing. The major findings are that housing demand is a function of both expected inflation and the real interest rate but that demand cannot be specified as a function of the nominal rate. It is also shown that expected inflation has a larger impact on those households that are likely to be constrained by capital market imperfections.
Real and Nominal Interest Rates and the Demand for HousingRobert M. Schwab ,
2( 13 )
Journal of Urban Economics