TY - JOUR
T1 - Borrowing constraints and housing market liquidity
AU - Eerola, Essi
AU - Määttänen, Niku
N1 - Tähän voi tallentaa cc-lisenssillä lopullisen version artsusta, kun siinä on sivu ym. tiedot. /Maria Söderholm
PY - 2018/1
Y1 - 2018/1
N2 - We study how changes in household borrowing constraints influence housing market liquidity. To this end, we develop a housing market model with both matching and credit frictions. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. In the model, housing market liquidity is very sensitive to changes in household credit conditions. In particular, a moderate tightening of household borrowing constraints increases the average time-on-the-market and idiosyncratic price dispersion substantially.
AB - We study how changes in household borrowing constraints influence housing market liquidity. To this end, we develop a housing market model with both matching and credit frictions. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. In the model, housing market liquidity is very sensitive to changes in household credit conditions. In particular, a moderate tightening of household borrowing constraints increases the average time-on-the-market and idiosyncratic price dispersion substantially.
KW - Borrowing constraint
KW - Housing
KW - Matching
UR - http://www.scopus.com/inward/record.url?scp=85027446689&partnerID=8YFLogxK
U2 - 10.1016/j.red.2017.07.003
DO - 10.1016/j.red.2017.07.003
M3 - Article
AN - SCOPUS:85027446689
SN - 1094-2025
VL - 27
SP - 184
EP - 204
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
ER -