Prices and Trading Volume in the Housing Market: A Model with Down-Payment Effects
AbstractThis paper presents a simple model of trade in the housing market. The crucial feature is that a minimum down payment is required for the purchase of a new home. The model has direct implications for the volatility of house prices as well as for the correlation between prices and trading volume. The model can also be extended to address the correlation between prices and time-to-sale as well as certain aspects of the cyclical behavior of housing starts. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Quarterly Journal of Economics.
Volume (Year): 110 (1995)
Issue (Month): 2 (May)
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Other versions of this item:
- Jeremy C. Stein, 1993. "Prices and Trading Volume in the Housing Market: A Model with Downpayment Effects," NBER Working Papers 4373, National Bureau of Economic Research, Inc.
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