We propose a life-cycle model of the housing market with a property ladder and a credit constraint. We focus on equilibria that replicate the facts that credit constraints delay some households' first home purchase and force other households to buy a home smaller than they would like. The model...

This paper presents a dynamic theory of housing market fluctuations. It develops a life-cycle model where households are heteroeneous with respect to income and preferences and mortgage lending is restricted by a down-payment requirement. The market interaction of young credit-constrained...

Standard explanations for the observed income heterogeneity within communities rely on differences of preferences across households and heterogeneity of the housing stock. We propose a dynamic stochastic model of location choice where households differ according to income only, and homes are...