Abstract:We develop a model of the housing market that features both financial and matching frictions. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Each household either rents or owns its house. Some renter households...

Abstract:We develop a model of the housing market that features both financial and matching frictions. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Each household either rents or owns its house. Some renter households...

I develop a dynamic search model of the housing market in which prices, determined by auction, exhibit greater volatility than prices in the search and matching model with Nash bargaining from the literature. This helps solve the puzzle of excess volatility of house prices. The outcomes of the...

Bargaining and mortgage financing have been extensively studied in the literature. However, they have only been studied separately. This paper is the first to embed financing into a bargaining model, and our model yields several new insights. First, we show that financing creates new ground for...

I develop a tractable dynamic model of the housing market where the prices are determined in auctions rather than by Nash bargaining as in the housing search model from the literature. The model with auctions mimics the actual housing markets by generating fluctuations between the booms and...

The housing market crash in 2007 followed by a banking crisis and deep recession led to many underwater mortgages and a large shadow inventory of unsold properties. An innovative mechanism that may be playing a role in lowering inventories is the emergence of rent-to-own (RTO) housing contracts....

I study a staggered policy change intended to reduce bidding wars for homes by increasing their list price and eliminating underpricing. Using a novel and large micro data set and a difference-in-difference methodology, I find that increasing the list price reduces the buyer arrival rates in all...

We study the microstructure of the U.S. housing market using a novel data set comprising housing search and bargaining behavior for millions of interactions between sellers and buyers. We first establish a number of stylized facts, the most prominent being a nearly 50--50 split between houses...

I study the effects of improved public information on equilibrium welfare and price dispersion, providing sufficient conditions for negative and positive effects. Public information affects welfare by reducing excessive (though rational) pessimism induced by sequential learning. Reduced...

Climate dynamics and weather variations affect search and matching processes. We provide evidence for the housing market by analyzing the impact of high temperatures on housing search. By leveraging on unique data for Italy, tracking online clicks and contact requests for 2 million home listings...