ABSTRACT
The economic fortunes of many participants in the U.S. economy are sensitive to changes in the value of the owner-occupied housing stock. Individual owner-occupants are sensitive because housing is usually the most valuable asset in their portfolios. Residential structures represent about 25 percent of the value of all assets in the United States (Federal Reserve System 1991, 5, Table 1). The local government sector is also sensitive because property tax revenues are directly related to the value of the housing stock. Local governments collected about $50 billion from the property tax on owner-occupied housing in 1987 (Peters 1988). Businesses that help households preserve and enhance the value of owner-occupied housing are also affected. The gross housing product in 1989 was $440 billion, which is largely made up of nonfarm owner-occupied housing and represents about 9 percent of GNP (U.S. Department of Commerce 1991, 724, Table 1279).
