Housing Prices and Credit Constraints in Competitive Search

A-Tier
Journal: Economic Journal
Year: 2024
Volume: 134
Issue: 657
Pages: 220-270

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Wealthier, risk-averse buyers pay more to speed up transactions in competitive search markets. This result is established in a dynamic housing model where households save to smooth consumption and build a down payment. ‘Block recursivity’ is ensured by the existence of risk-neutral housing intermediaries. In the long run, the calibrated benchmark features higher indebtedness and house prices than a Walrasian model, especially when housing supply elasticity is low. The long-run price effects of greater credit availability are much larger if rental and owner-occupied stocks are segmented, but even without segmentation they can be substantial when supply elasticity is low.

Technical Details

RePEc Handle
repec:oup:econjl:v:134:y:2024:i:657:p:220-270.
Journal Field
General
Author Count
3
Added to Database
2026-01-25