Work

Momentum traders in the housing market: survey evidence and a search model

Year: 2009

Type: report

Abstract: This paper studies household beliefs during the recent US housing boom.The first part presents evidence from the Michigan Survey of Consumers.To characterize the heterogeneity in households' views about housing and the economy, we perform a cluster analysis on survey responses at different stages of the boom.The estimation always finds a small cluster of households who believe it is a good time to buy a house because house prices will rise further.The size of this "momentum" cluster doubled towards the end of the boom.The second part of the paper provides a simple search model of the housing market to show how a small number of optimistic investors can have a large effect on prices without buying a large share of the housing stock.

Source: National Bureau of Economic Research

DOI: 10.3386/w14669

Authors: Monika Piazzesi, Martin Schneider

Institutions: National Bureau of Economic Research, University of Chicago, Stanford University

Language: English

Topic: Housing Market and Economics

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2114871913

Cites: 3

Cited by: 162

Related to: 10