Home > News

Morris Davis’ Research on Housing Prices Attracts National Attention

January 3, 2008

Research on house prices by Morris Davis, an assistant professor of real estate and urban land economics at the Wisconsin School of Business, is gathering national attention.  

Morris conducted research on U.S. home prices as a Federal Reserve economist, along with two other Fed economists still on staff, Andreas Lehnert and Robert F. Martin. 

Their research indicated that U.S. home prices would likely have to fall considerably to return to a normal relationship with rent.  Their study suggests that prices would have to fall 15 percent over five years, assuming rents rose 4 percent a year. Morris told the Wall Street Journal that he and his co-authors look to a five-year horizon for the rent-price ratio  to return  to normal.

Morris was interviewed by the Wall Street Journal for an article on the study. (subscription required)

In December, Morris testified before the U.S. Senate Finance Committee on home prices and the broader economy. Read his testimony

Davis’ testimony, in part, made the case that a decline in house prices will be accompanied by a slowdown in residential investment and the gross domestic product. He noted that residential investment is already below trends, and is expected to fall further as house prices fall.

Davis is an often-cited expert on housing and its impact on the macro economy. He is best known for his research on the interaction of the macroeconomy and housing prices. Both the national media and U.S. public policy leaders have turned to Davis recently for insight on the topic. The New York Times, for example, recently quoted him in an article on the relationship between housing prices and birth rates and his views on housing's impact on the national economy were sought by the Christian Science Monitor.