Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Building Costs and House Prices
Journal of Economic Perspectives
(pp. 67–86)
(Complimentary)
Abstract
We take a long, broad, and theoretically agnostic view toward the connection between building costs and house prices in the US housing market. We find that building costs have never had all that much explanatory power over US housing prices, but even the imperfect correlations of the past have weakened further in recent decades along multiple dimensions.Citation
Potter, Brian, and Chad Syverson. 2025. "Building Costs and House Prices." Journal of Economic Perspectives 39 (3): 67–86. DOI: 10.1257/jep.20241432Additional Materials
JEL Classification
- L74 Construction
- R31 Housing Supply and Markets