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

Monika Piazzesi and Martin Schneider

No 422, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: This paper studies household beliefs during the recent US housing boom. 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. We also provide 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. ; This paper is an extension of Monika Piazzesi's and Martin Schneider's work while they were in the Research Department of the Federal Reserve Bank of Minneapolis.

Keywords: Housing; Inflation (Finance); Interest rates (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cba and nep-ure
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Citations: View citations in EconPapers (325)

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http://www.minneapolisfed.org/research/SR/SR422.pdf

Related works:
Journal Article: Momentum Traders in the Housing Market: Survey Evidence and a Search Model (2009)
Working Paper: Momentum traders in the housing market: survey evidence and a search model (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:422

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