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Demographic Factors and Real House Prices

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  • Richard K. Green
  • Patric H. Hendershott

Abstract

Real house prices are directly determined by the willingness of households to pay for (and willingness of builders to supply) a constant-quality house. Changes in the quantity of housing demanded will affect real prices only to the extent that the long-run housing supply schedule is positively sloped. In this paper we use 1980 census data to measure the impact of the age structure and real income per household on the willingness of households to pay for a constant quality house. Extrapolating these variables forward to 2010, we conclude that evolving demographic forces are likely to raise real house prices. not lower them.

Suggested Citation

  • Richard K. Green & Patric H. Hendershott, 1993. "Demographic Factors and Real House Prices," NBER Working Papers 4332, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4332
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    References listed on IDEAS

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    1. Ohtake, Fumio & Shintani, Mototsugu, 1996. "The effect of demographics on the Japanese housing market," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 189-201, April.
    2. Green, Richard K., 1996. "Should the stagnant homeownership rate be a source of concern?," Regional Science and Urban Economics, Elsevier, vol. 26(3-4), pages 337-368, June.
    3. Pat Wilson & John Okunev & Guy Ta, 1994. "Are Real Estate and Securities Markets Integrated? Some Australian Evidence," Working Paper Series 42, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    4. John Okunev & Patrick J. Wilson, 1997. "Using Nonlinear Tests to Examine Integration Between Real Estate and Stock Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 25(3), pages 487-503, September.
    5. Fathali Firoozi & Abolhassan Jalilvand & Donald Lien & Mikiko Oliver, 2020. "The Impact of Population Aging on Housing Prices: A Comparative Study of Singapore and the U.S," International Real Estate Review, Global Social Science Institute, vol. 23(4), pages 467-482.

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    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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