Using data on house sales and inventories, this paper shows that housing-market dynamicsudare driven mainly by listings and less so by transaction speed, thus the decision to move houseudis key to understanding the housing market. The paper builds a model where moving house isudessentially an investment in match quality, implying that moving depends on macroeconomicuddevelopments and housing-market conditions. The endogeneity of moving means there is audcleansing effect — those at the bottom of the match quality distribution move first — whichudgenerates overshooting in aggregate variables. The model is applied to the 1995–2004 housingmarketudboom.
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