The Forces Behind Rising Housing Prices
Understanding the current—and potentially future—state of the global economy helps investors put market movements into context. To promote that understanding, researchers from Vanguard Investment Strategy Group examine the economic trends that affect the investing environment in this new series. Below are their latest insights into Global Macro Matters.
Rapid appreciation in housing prices in much of the world has added to growing concern that major economies could soon experience a recession. House prices are at or above levels seen on the eve of the global financial crisis. A new Global Macro Matters paper, The Foundations of Housing, which focuses on four of the world's largest and most developed housing markets, finds that structural forces—supply, demographics, and interest rates—are responsible for much of the housing price rally.