By Alison Rice. Just when the housing bubble talk was deflating, a new International Monetary Fund (IMF) study of 21 industrialized countries raises the issue again, suggesting that housing crashes hurt economies more than stock crashes.

According to the report "When Bubbles Burst," housing busts, compared to equity busts, last longer, cause more economic damage, and are more likely to follow a boom (see chart).

American housing economists have hardly embraced such conclusions. Celia Chen, director of housing economics for, an economic research firm in West Chester, Pa., calls the IMF report "an exercise in event analysis" in one of her commentaries. As for the alarm-inducing suggestion that housing booms are more likely than equity booms to become a bust, the NAHB says the finding is "largely irrelevant to the housing market in the United States," given that the United States hasn't experienced a housing bust during the 32 years covered in the study.

It points out that the IMF study didn't account for local factors that could contribute to a housing boom or limit a housing bust in individual countries, such as the United States' influx of immigrants, a period of historically low interest rates, and a housing finance system and tax structure that makes homeownership more affordable and attractive here than in other countries.

Housing vs. Stocks

Busted: Here's how housing and stocks compare when it comes to busts, according to a controversial IMF study on bubbles in industrialized nations.

Housing Stocks
Definition of a bust Price declines exceeding 14 percent Price declines exceeding 37 percent
Typical bust frequency Every 20 years Every 13 years
Actual price declines 30 percent 45 percent
Bust follows boom 40 percent of time 25 percent of time
Bust duration 4 years 2.5 years
Economic output loss 8 percent 4 percent

Source: "When Bubbles Burst," IMF study