Discussion Paper Details

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Title: The Ins and Arounds in the U.S. Housing Market

Author(s): Rüdiger Bachmann and Daniel Cooper

Publication Date: June 2014

Keyword(s): housing market, housing turnover, net and gross flows and PSID

Programme Area(s): International Macroeconomics

Abstract: In the U.S., 15 percent of households move in a given year. This result is based on data from the Panel Study of Income Dynamics on gross flows within and between the two segments of the housing market - renter-occupied properties and owner-occupied properties. The gross flows between these two segments are four times larger than the net flows. From a secular perspective, housing turnover exhibits a hump-shaped pattern between 1970 and 2000, which this paper attributes to changes in the age composition of the U.S. population. At higher frequencies, housing turnover is procyclical and tends to lead the business cycle and real house prices. By taking a two-segment view of the U.S. housing market and by documenting carefully the empirics of turnover within and between these segments, the paper provides important moments for and gives empirical guidance to the design, calibration, and evaluation of micro-founded, dynamic, and quantitative models of the U.S. housing market.

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Bibliographic Reference

Bachmann, R and Cooper, D. 2014. 'The Ins and Arounds in the U.S. Housing Market'. London, Centre for Economic Policy Research.