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The decision to move house and aggregate housing-market dynamics

Author

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  • Ngai, L. Rachel
  • Sheedy, Kevin D.

Abstract

Using data on house sales and inventories, this paper shows that housing transactions are driven mainly by listings and less so by transaction speed, thus the decision to move house is key to understanding the housing market. The paper builds a model where moving house is essentially an investment in match quality, implying that moving depends on macroeconomic developments and housing-market conditions. The number of transactions has implications for welfare because each transaction reduces mismatch for homeowners. The quantitative importance of the decision to move house is shown in understanding the U.S. housing-market boom during 1995–2003.

Suggested Citation

  • Ngai, L. Rachel & Sheedy, Kevin D., 2020. "The decision to move house and aggregate housing-market dynamics," LSE Research Online Documents on Economics 100890, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:100890
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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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