Economics, Econometrics and Finance
4 years ago

House prices drive consumption trends, impacting younger households the most.

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RePEc: Research Papers in Economics
Consumption, house prices and expectations
Orazio Attanasio, Laura Blow, Robert Hamilton, Andrew Leicester

Paper Summary

House prices and consumption have been closely linked for the past 25 years. The connection is stronger for younger households. Both homeowners and renters spend more when house prices go up. This suggests that common factors, not wealth or collateral, drive the relationship between house prices and consumption.

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