This paper describes an equilibrium life-cycle model of housing where nonconvex adjustment costs lead households to … adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model … of housing adjustment. In the time-series dimension, the model accounts for the procyclicality and volatility of housing …

.S. housing crisis. At the peak of the recent housing cycle, both borrowers and lenders appealed to optimistic house price … theoretical and empirical evidence that pointed to a massive overvaluation of housing and thus to an inevitable and severe price … time. Many economists, skeptical that a bubble existed, attempted to justify the historic run-up in housing prices based on …

two distinct segments of the housing market — renter-occupied properties and owner-occupied properties. The paper provides … relevant empirical moments for microfounded models of the housing sector. In particular, net flows in the housing market are … substantially smaller than the gross flows, as is the case in the literature on labor market flows. Housing market turnover also …

We study a model of portfolio choice, in which housing prices are predictable and adjustment costs must be paid when … there is a housing transaction. We show that two state variables affect the agent's decisions: (i) his wealth-house ratio …; and (ii) the time-varying expected growth rate of housing prices. The agent buys (sells) his housing assets only when the …