Housing sales and construction responses to COVID‐19: Evidence from shelter‐in‐place and eviction moratoria in the United States

Abstract

The goal of this article is to analyze the county‐level impact of public policies related to COVID‐19 on the housing market in the United States. Aimed at reducing the spread of the virus, different states throughout the United States enacted nonpharmaceutical interventions (NPIs) such as shelter‐in‐place (SIP) and eviction moratoria, in different months and for varied stretches throughout 2020 and 2021. SIP orders could potentially limit the ability of home‐buyers and sellers to interact as well as they could pre‐COVID, introducing frictions in the process of selling houses. Prolonged and overlapping eviction moratoria could dampen the construction of multifamily units and encourage the landlords to sell rented‐out apartments. This article attempts to investigate if and how these interventions causally impacted the county‐level housing sales and building permits approval in the United States. The article estimates the average treatment effect of these orders using a traditional generalized difference‐in‐difference estimator and a recent variation of the estimator that is more suited to multiple treatment groups with staggered treatment introductions and withdrawals. The results show that SIP is associated with significantly smaller year‐on‐year changes in sales of single‐family houses, condominiums and the collection of all residences. Selective moratoria on eviction hearings and judgments are also found to be associated with smaller year‐on‐year changes in multifamily building permit approvals.