July 27, 2025

Effects of Monetary Policy on Household Expectations: The Role of Homeownership and Tenancy in USA

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Analysis shows that monetary policy alters household expectations for homeowners and renters, highlighting economic differences.

Homeowners respond more strongly to interest rate changes due to mortgage costs and housing wealth.
Renters exhibit muted reactions, influenced primarily by employment conditions and rent inflation.
Using microdata from surveys, the research highlights differences in monetary policy effects between ownership statuses.
The findings suggest central banks need tailored communication strategies to address household differences in policy sensitivity.

Utku Altunöz (2025) studied this question.

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