Divergence of House Prices in the United States: 2000 to 2015

44 Pages Posted: 1 Oct 2020

See all articles by Liang Peng

Liang Peng

Smeal College of Business, The Pennsylvania State University

Lei Zhang

North Dakota State University

Date Written: August 16, 2020

Abstract

Housing is the largest component of most American households’ wealth. Divergence of house prices directly affects wealth inequality. Using 5.9 million repeat sales of single-family houses, we find strong evidence that pricier houses had higher price appreciation rates from 2000 to 2015. Across houses, when the log house price increased by one standard deviation, the price appreciation rate increased by 70 to 100 basis points per annum. The superior performance of pricier houses was more pronounced in periods when the housing market performed poorly. We also use a variety of specifications to document detailed temporal variation and non-linearity of the relationship between houses’ price appreciation and their prices.

Keywords: house price, price appreciation, divergence

JEL Classification: G12, R33

Suggested Citation

Peng, Liang and Zhang, Lei, Divergence of House Prices in the United States: 2000 to 2015 (August 16, 2020). Available at SSRN: https://ssrn.com/abstract=3675058 or http://dx.doi.org/10.2139/ssrn.3675058

Liang Peng (Contact Author)

Smeal College of Business, The Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Lei Zhang

North Dakota State University ( email )

811 2nd Ave N
FARGO, ND ND 58102
United States

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