The Housing Futures Market

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Daniel T. Winkler, Professor (Creator)
The University of North Carolina at Greensboro (UNCG )
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Abstract: The Chicago Mercantile Exchange (CME) in May 2006 began trading housing futures contracts and options, in response to the growing concern with housing risk. This paper reviews the development and operation of the CME housing futures market. The findings indicate that speculators earn significant risk premiums for assuming the risk of future fluctuations in housing prices. These returns and risks, however, appear to be substantially different than the risks and returns earned by those who invest in housing directly. The CME housing futures market offers a way for individuals, businesses, and others to transfer housing risk, which would seem to be important given the importance of housing to household wealth and the overall economy, but low trading volumes indicate that few have been willing to utilize this mechanism.

Additional Information

Journal of Real Estate Literature 17(2), 181-203
Language: English
Date: 2009
Housing Market, Housing Futures Market, Real Estate

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