The revolution in real estate finance /

Written for an informed but not technically knowledgeable audience, Downs covers in detail the changes that have taken place in the methods of financing real estate as well as in the institutions that are the intermediaries in this market. He notes that five major changes have affected real estate finance since the mid-1970s: changes in inflationary expectations on the part of investors; loss through deregulation and tax changes of housing's favored status in the credit markets; a shift toward a stimulating fiscal but a relatively tight monetary policy; partial deregulation of financial markets; and technical improvements in electronic transfer of funds. As a result, during the 1980s we have experienced both higher nominal as well as real interest rates as compared with the 1960s. Moreover, the capital market for housing has become integrated with the general capital market. Downs develops the details underlying these changes and their impact upon the housing market. He closely examines the future of further deregulation which will leave the financial institutions active in real estate completely free to alter their portfolios as they see fit. The book is a welcome addition to the limited literature in the field. It can be recommended for all undergraduate libraries as a volume of general interest for work in economic and financial policy.-W.S. Curran, Trinity College, Conn.