Housing prices and credit constraints in competitive search

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dc.contributor.author Díaz, Antonia
dc.contributor.author Jerez, Belén
dc.contributor.author Rincón-Zapatero, Juan Pablo
dc.contributor.editor Universidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned 2022-07-26T17:25:50Z
dc.date.available 2022-07-26T17:25:50Z
dc.date.issued 2022-07-26
dc.identifier.issn 2340-5031
dc.identifier.uri http://hdl.handle.net/10016/35536
dc.description.abstract This paper shows that, when utility is imperfectly transferable and the search process is competitive (or directed), wealthier buyers pay higher prices to speed up transactions. This result is established in a dynamic model of the housing market where households save both to smooth consumption and to build a down payment. "Block recursivity" is ensured by the existence of risk-neutral housing intermediaries. The calibrated version of our benchmark economy features greater indebtedness and higher housing prices in the long run compared to aWalrasian model, especially when the elasticity of new housing supply is low. We also show that the long-run effect of greater credit availability on housing prices depends crucially on whether or not rental and real estate housing stocks are segmented. Under full segmentation, price effects are much larger, with and without search frictions. But, even if there is no segmentation, these effects are substantial in our search model when supply elasticity is low, being larger than in the Walrasian version of the model. The last result is reversed with full segmentation, when search frictions dampen the price effect of the credit expansion.
dc.description.sponsorship Support from the Spanish Ministerio Economía y Competitividad, grants ECO2016-76818-C3-1-P, ECO2017-86261-P, , MDM 2014-0431, and Comunidad de Madrid (Spain), grant EPUC3M11 (V PRICIT), are gratefully acknowledged.
dc.language.iso eng
dc.relation.ispartofseries Working paper. Economics
dc.relation.ispartofseries 22-14
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.other Competitive Search
dc.subject.other Wealth Effects
dc.subject.other Housing Prices
dc.subject.other Credit Constraints
dc.subject.other Housing Supply Elasticity
dc.subject.other Rental Market
dc.title Housing prices and credit constraints in competitive search
dc.type workingPaper
dc.subject.jel D31
dc.subject.jel D83
dc.subject.jel E21
dc.subject.jel R21
dc.subject.jel R30
dc.subject.eciencia Economía
dc.relation.projectID Gobierno de España. ECO2016-76818-C3-1-P
dc.relation.projectID Gobierno de España. ECO2017-86261-P
dc.relation.projectID Gobierno de España. PID2019-107161GB-C31
dc.relation.projectID Comunidad de Madrid. MDM 2014-0431
dc.identifier.uxxi DT/0000002020
dc.contributor.funder Ministerio de Economía y Competitividad (España)
dc.contributor.funder Comunidad de Madrid
dc.affiliation.dpto UC3M. Departamento de Economía
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