Pricing the US residential asset through the rent flow: A cross-sectional study

► The Euler equations of gross housing returns are estimated for 22 US regions. ► We assume a Constant Relative Risk Aversion (CRRA) utility function. ► Data from 1978 to 2007 indicates reasonable utility parameter estimates. ► GMM J-Test is not rejected. Price rent ratio time series averages are reasonable. ► The model completely misses the boom-bust pattern in prices.