| Popis: |
We document that mortgaged homebuyers pay an 11% premium relative to all-cash buyers in residential real estate transactions. This premium far exceeds the 3\% premium implied by a realistically calibrated model of rational home sellers with transaction frictions. We obtain similar results from various estimators (e.g., repeat-sales, instrumental-variable, matching, semi-structural), novel data on non-accepted offers, and an experimental survey of U.S. homeowners. Experimental evidence suggests that the combination of non-standard preferences and standard beliefs best explains the 8% puzzle (11% minus 3%). Our findings matter economically, as all-cash purchases account for one-third of all U.S. home purchases over 1980-2017. |
