PSID replication data (1999-2017) and codes for paper on "Liquidity Constraints in the U.S. Housing Market" by Corina Boar, Denis Gorea and Virgiliu Midrigan

<div>We study the severity of liquidity constraints in the U.S. housing market using a</div><div>life-cycle model with uninsurable idiosyncratic risks in which houses are illiquid, but</div><div>agents can extract home equity by refinancing their mortgages. The model implies that</div><div>four-fifths of homeowners are liquidity constrained and willing to pay an average of 13</div><div>cents to extract an additional dollar of liquidity from their home. Most homeowners</div><div>value liquidity for precautionary reasons, anticipating the possibility of income declines</div><div>and the need to make mortgage payments. The model reproduces well the observed</div><div>response of consumption to tax rebates and mortgage relief programs and predicts large</div><div>welfare gains from policies aimed at providing temporary liquidity relief to homeowners.</div>