The future of housing in the United States: an econometric model of long-term predictions for the 2000 RPA timber assessment.

Summary Montgomery, C.A. 2001. The future of housing in the United States: an econometric model and long-term predictions for the 2000 RPA timber assessment. Res. Pap. PNW-RP-531. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 38 p. This paper reports a structural model of the U.S. housing sector that was used to generate the key housing assumptions used in the 2000 Resources Planning A c t timber assessment: number of households, improvement expenditure, and square footage of new residential construction by unit type. Assuming average annual population growth of 0.77 percent and real income growth of 1.99 percent, the model predicts 1.30 percent average annual growth in housing investment, compared to 2.04 percent annual growth since 1952. The allocation between new construction and home improvement remains fairly constant at about 56 percent and 44 percent, r e s p e c t i v e l y. Scenario analysis was used to test sensitivity of the predictions to key macroeconomic assumptions.

[1]  Price elasticities for softwood plywood and structural particleboard in the United States , 1984 .

[2]  J. Follain,et al.  Incorporating the Number of Existing Home Sales into a Structural Model of the Market for Owner-Occupied Housing , 1995 .

[3]  J. Shilling,et al.  The Economics of Tenure Choice: 1955-79 , 1980 .

[4]  W. Wheaton,et al.  Housing Market Dynamics and the Future of Housing Prices , 1994 .

[5]  Henry Spelter.  A Product Diffusion Approach to Modeling Softwood Lumber Demand , 1985 .

[6]  G. Kenny.  Modelling the demand and supply sides of the housing market: evidence from Ireland1 , 1999 .

[7]  R. Shiller,et al.  Inflation, Rational Expectations and the Term Structure of Interest Rates , 1973 .

[8]  R. Barro,et al.  Measuring the Average Marginal Tax Rate from the Individual Income Tax , 1983 .

[9]  Jr. James R. Follain.  The Price Elasticity of the Long-Run Supply of New Housing Construction , 1979 .

[10]  Claire A. Montgomery.  Explaining home improvement in the context of household investment in residential housing , 1992 .

[11]  R. W. Haynes,et al.  The 1993 timber assessment market model: structure, projections, and policy simulations. , 1996 .

[12]  D. M. Blackley.  The Long-Run Elasticity of New Housing Supply in the United States: Empirical Evidence for 1950 to 1994 , 1999 .

[13]  Stephen E. Margolis.  Depreciation of Housing: An Empirical Consideration of the Filtering Hypothesis , 1982 .

[14]  T. E. Hamilton,et al.  Forest and Rangeland Renewable Resources Planning Act , 1984 .

[15]  D. Wise,et al.  Discontinuous Budget Constraints and Estimation: The Demand for Housing , 1980 .

[16]  J. Hausman.  The Econometrics of Nonlinear Budget Sets , 1985, Annual Review of Economics.

[17]  R. Haines.  Monongahela and the National Forest Management Act of 1976 , 1977 .

[18]  Richard W. Haynes,et al.  The 1993 RPA timber assessment update , 1995 .

[19]  Kenneth T. Rosen,et al.  The Demand for Housing, Household Headship Rates, and Household Formation: An International Analysis , 1984 .

[20]  Bryan W. Brown,et al.  THE IDENTIFICATION PROBLEM IN SYSTEMS NONLINEAR IN THE VARIABLES , 1983 .