Year: 2025
Type: article
Abstract: ABSTRACT Based on centuries of data, we demonstrate that demographics have been a major, predictable driver of house prices. High birth rates 25 to 29 (60 to 64) years ago predict declining (rising) rent‐price ratios today. This pattern arises from age‐concentrated entry into and exit from homeownership affecting house prices, rather than changes in housing consumption that could also impact rents. We provide evidence for possible mechanisms: slow responses of other market participants to shifts in homeownership demand, and geographic segmentation between rental and owner‐occupied markets. Evidence for age‐dependent demand effects on yields of bonds and stocks is significantly weaker.
Source: The Journal of Finance
DOI: 10.1111/jofi.13480
Authors: MARC FRANCKE, MATTHIJS KOREVAAR
Institutions: University of Amsterdam, Erasmus University Rotterdam
Language: English
Topic: Housing Market and Economics
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $4,430
Funder: European Commission
Award: G434337789
OpenAlex ID: W7083190858