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

Monika Piazzesi and Martin Schneider

No 14669, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies household beliefs during the recent US housing boom. The first part presents evidence from the Michigan Survey of Consumers. 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. The second part of the paper provides 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.

JEL-codes: E0 G1 G12 R2 R21 R31 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-geo, nep-mac and nep-ure
Note: AP EFG ME
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Citations: View citations in EconPapers (312)

Published as Monika Piazzesi & Martin Schneider, 2009. "Momentum Traders in the Housing Market: Survey Evidence and a Search Model," American Economic Review, American Economic Association, vol. 99(2), pages 406-11, May.

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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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