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

We study the severity of liquidity constraints in the U.S. housing market using alife-cycle model with uninsurable idiosyncratic risks in which houses are illiquid, butagents can extract home equity by refinancing their mortgages. The model implies thatfour-fifths of homeowners are liquidity constrained and willing to pay an average of 13cents to extract an additional dollar of liquidity from their home. Most homeownersvalue liquidity for precautionary reasons, anticipating the possibility of income declinesand the need to make mortgage payments. The model reproduces well the observedresponse of consumption to tax rebates and mortgage relief programs and predicts largewelfare gains from policies aimed at providing temporary liquidity relief to homeowners.