The residential housing market is dominated by households that are often inefficient at processing information. This paper presents evidence that the media play an information-providing role that affects short-term housing price dynamics. Large volume of housing news can create differing views on the housing market among households. Coupled with shorting constraint in the housing market, differing views on the housing market leads to short-term increase in house prices. I provide evidence for this hypothesis in two ways. I first provide evidence using plausibly exogenous variation on housing news around FOMC meeting dates, media can causally affect households’ home-buying decisions. Secondly, I show using county-level panel time-series regression that increase in housing news is associated with 7-10 bp (annualized) housing return over the next 4 to 6 months.

Keywords: Short-term House Price Movement, Media, Information

JEL classification: D10, G11