Housing Prices and Credit Constraints in Competitive Search

Bibliographic Data

ID9949583
AuthorsAntonia Dı́az (0000-0003-3604-0728, Institut d'Anàlisi Econòmica, corresponding author), Antonia Díaz (ICAE (Complutense Institute of Economic Analysis) , Spain), Belén Jerez (0000-0001-9774-6500, Universidad Carlos III de Madrid), Juan Pablo Rincón‐Zapatero (0000-0002-5729-0630, Universidad Carlos III de Madrid), Juan Pablo Rincón-Zapatero (Universidad Carlos III de Madrid)
Year2023
Volume134
Issue657
Pages220-270
Publication date2023-07-24
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1093/ej/uead054
OpenAlexW2977713647
LanguageEN
References cited51

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

Benchmark (surveying · Business · Consumption (sociology · Economics · Elasticity (physics · Intermediary · Microeconomics · Monetary economics · Payment · Price elasticity of demand · Price elasticity of supply · Renting · Banking stability, regulation, efficiency · Economic theories and models · Finance · Housing Market and Economics

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