Submission Title

Understanding the Rise In Residential Real-Estate Prices

Author Information

Peter OakesFollow

Location

Jereld R. Nicholson Library: Grand Avenue

Subject Area

Economics

Description

Abstract

Residential real estate prices have risen substantially in the United States since 2000. This paper assumes that observations of real estate prices are in equilibrium, this allows a focus on the demand side drivers to determine what influences prices. Using economic inputs such as interest rates and recessions in union with consumer willingness to pay, this paper regresses variables on the demand side of home buying to identify which are significant drivers and which are not. The adjusted regression found that there was a stronger correlation between consumer inputs on the demand side than economic drivers. Converted supply-side metrics, ie. land prices, also had a strong correlation to home prices as well as income-related drivers.

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Understanding the Rise In Residential Real-Estate Prices

Jereld R. Nicholson Library: Grand Avenue

Abstract

Residential real estate prices have risen substantially in the United States since 2000. This paper assumes that observations of real estate prices are in equilibrium, this allows a focus on the demand side drivers to determine what influences prices. Using economic inputs such as interest rates and recessions in union with consumer willingness to pay, this paper regresses variables on the demand side of home buying to identify which are significant drivers and which are not. The adjusted regression found that there was a stronger correlation between consumer inputs on the demand side than economic drivers. Converted supply-side metrics, ie. land prices, also had a strong correlation to home prices as well as income-related drivers.