Ins and Outs of Selling Houses: Understanding Housing-Market Volatility by Rachel Ngai

Join us for this weeks Macroeconomics Research Seminar, Autumn Term 2022.

Dr Rachel Ngai from the London School of Economics will present this weeks Macroeconomics seminar; Ins and Outs of Selling Houses: Understanding Housing-Market Volatility

Abstract

The housing market is subject to search frictions in buying and selling houses. This paper documents the role of inflows (new listings) and outflows (sales) in explaining the volatility and co-movement of housing-market variables. An ‘ins versus outs’ decomposition shows that both inflows and outflows are quantitatively important in understanding fluctuations in houses for sale. The correlations between sales, prices, new listings, and time-to-sell are shown to be stable over time, while their correlations with houses for sale are found to be time varying. Using a housing-market model with endogenous inflows and outflows, a single persistent housing demand shock can explain all the patterns of co-movement among variables except for houses for sale. Consistent with the data, the model does not predict there is an invariant structural relationship between houses for sale and other variables—the correlation depends on the source and persistence of shocks.

This seminar will be held on zoom at 4pm on Tuesday 8 November. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.