Global Capital and Local Assets: House Prices, Quantities, and Elasticities

Caitlin Gorback; Benjamin J. Keys

doi:10.1093/rfs/hhag040

Global Capital and Local Assets: House Prices, Quantities, and Elasticities

Caitlin Gorback¹; Benjamin J. Keys²

¹ McCombs School of Business, University of Texas at Austin , · ² The Wharton School, University of Pennsylvania and NBER

Review of Financial Studies 2026 open access

Abstract We estimate price elasticities of housing supply for U.S. cities by examining the impact of foreign purchases on housing prices and quantities. After other countries introduced foreign-buyer taxes beginning in 2011, both house prices and quantities increased more in locations with high foreign-born populations. An increase in global capital inflows, instrumented with tax policy changes scaled by immigrant exposure, increased prices and quantities over 2011–2018. We combine these estimates to construct new local supply elasticities, which average 0.26 and range from 0.06 to 0.9. Compared to prior estimates, our elasticities are more inelastic and change cities’ relative rankings.

DOI: 10.1093/rfs/hhag040
Language: en
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