The reason of housing prices volatility has been a core issue of real estate economics. With the rise of behavioral economics, behavioral research methods can help to explain and predict the change of housing prices. Based on a review of the literature, this paper analyzes the studies on the origin from the perspective of behavioral economics, summarizes cognitive limitations and behavior deviation of the participator of real estate market. Then it combs through empirical test of the relationship between psychology and behavior of individual participants and housing prices fluctuation, discusses its influence mechanism, summarizes the deficiency of the existing research and looks ahead into the future research emphasis.