Housing Supply under Long-term Uncertain Situation: A Counterfactual Framework Based on ARMA Model

Abstract

The monthly supply of houses is a critical part in housing markets in US. It reflects the condition of economy and conversely exerts an influence to the economy. It is an important number for sellers to have in mind when planning the sale of a property investment and buyer can based on it to make their decision in making purchases. Across the United States, the COVID-19 pandemic has resulted in considerable confirmed cases every month which might influence people’s decisions in changing locations and buying new houses, thus affected the variation of the monthly supply. This paper judges the negative impact of COVID-19 on the real estate industry in the United States by establishing the difference in DF value obtained by ARMA model, discusses the possible reasons for the fluctuation of new house supply in the United States, and puts forward some suggestions on how to deal with the crisis of the real estate industry in similar situations in the future, so as to avoid the economic downturn of real estate enterprises in similar situations and achieve the stability of the housing economy. Data analysis process was conducted by the use of R statistical programming.