The paper presents a model of housing and credit cycles featuring distorted beliefs and comovement and mutual …) development in house prices fuels optimism (pessimism) and credit expansion (contraction), which in turn boost (dampen) housing …

House prices have inertia, which may be because housing-market participants need time to recognize long booms and … recessions. Within a dynamic stochastic general-equilibrium model with markets for housing and defaultable mortgages, I consider …

cost housing market model, involving a rental and a housing capital market. In particular, investors switch between … analytically show that our housing market model may produce endogenous boom-bust dynamics. Furthermore, we demonstrate that policy … makers may use our model as a tool to explore how different tax policies may affect the housing market's steady state, its …