Keywords
housing wealth, search frictions, regional price pressure
Abstract
We construct a novel dataset of millions of household moves over 25 years to examine how housing wealth affects purchase decisions. We find that a $1 exogenous increase in housing equity leads movers to pay a $0.06 premium on their next home, controlling for property characteristics and time-varying local prices. This behavior is driven by search frictions— wealthier households pay a premium rather than incur additional search costs. In aggregate, these decisions spill over to the broader housing market and cause upward regional price pressure. A 10% increase in equity gain among incoming movers increases local house price growth by 0.4 percentage points.
Original Publication Citation
When Money Moves In: The Consequences of Housing Wealth (2024) with Jason Kotter and Gregor Schubert Revise and Resubmit, Journal of Financial Economics
BYU ScholarsArchive Citation
Aiello, Darren; Kotter, Jason; and Schubert, Gregor, "When Money Moves In: The Consequences of Housing Wealth" (2026). Faculty Publications. 9133.
https://scholarsarchive.byu.edu/facpub/9133
Document Type
Working Paper
Publication Date
2026
Publisher
Journal of Financial Economics
Language
English
College
Marriott School of Business
Department
Finance
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