A Study on the Interrelationship Among Interest Rate, Housing Consumer Sentiment and Housing Market Using SVAR Model [in Korean]

The purpose of this study is aimed at investigating the interrelationship among mortgage interest rate, housing consumer sentiment, and housing market. This study used a Structural VAR(SVAR) model that can analyze the ripple impacts among the variables. As a result, firstly, the change of mortgage interest rate did not statistically significantly influence on the changes in housing consumer sentiment and housing market. However, the change in mortgage interest rate was largely explained by the variable itself. Secondly, the shock to housing consumer sentiment change had statistically significantly impact on the change in housing trade volume and housing price.

The change in housing consumer sentiment was largely explained by the change in housing trade volume. Finally, the change in the housing trade volume had effect on the housing price change. Therefore, this study provides the empirical evidence that the housing consumer sentiment is a significant factor in explaining the relationship between the housing trade volume and the housing price change both in short and long term period. This finding implies that the housing consumer sentiment is a supplemental important variable in understanding the housing market.