RT Generic
T1 Credit and Inventories in Illiquid Housing Markets
A1 Díaz Rodríguez, Antonia
AB Wealthier, risk-averse buyers pay more to expedite up transactions in competitive search markets. This, coupled with forward-looking intermediaries who hold vacant homes overnight, implies that a credit expansion produces a boom in prices that slowly recedes over time. This boom is due to a combination of two effects. First, search and matching frictions imply that buyers are willing to pay a higher price to trade faster, not only to consume housing services.Second, the fact that intermediaries are forward-looking implies that trading probabilities today depend on the future evolution of prices. Since agents forecast that prices are higher than in the initial steady state, they turn to trading today. Our theory produces a boom in prices that slowly recedes and a gradual rise of homeownership rate.
SN 2341-2356
YR 2024
FD 2024-10
LK https://hdl.handle.net/20.500.14352/108625
UL https://hdl.handle.net/20.500.14352/108625
LA eng
NO The author thanks the participants of the “Search and Matching in Housing Markets”, London, June 2024.
NO MICIU/AEI /10.13039/501100011033
DS Docta Complutense
RD 6 abr 2025