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CUCURACHI_44812200_2024.pdf
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- At the beginning of 2024, the median price of a house sold in the United States reached $420,000. That is $100,000 more than four years ago, before the Covid-19 crisis. Inflation and rising interest rates are often blamed for this rise in prices. However, it turns out that many other factors play an important role in the dynamics of house price variations. Therefore, this paper aims to analyze the impact of socio-economic variables, and variables specific to the real estate market environment to determine what drives house price dynamics in the U.S. Two methods are used to address this issue: OLS and VAR. The results of the OLS indicate that house prices rise in response to an increase in consumer sentiment and the number of new houses starts, but falls in response to an increase in the rent price index. Seasonality also plays an important role, accounting for almost 2/3 of the variance in house prices. The VAR shows similar results, but adds depth by including the temporal dynamics between variables and reveals that the house price variable is strongly influenced by its past values. The latter indicates that a rise in prices is often followed by a downward trend, as illustrated by the predictions made for the year 2024.