The long-term relationship between the US housing market and HNWIs

Abstract

PurposeThe authors analyze the long-term relationship between the US housing market and the concentration of high net worth individuals.Design/methodology/approachThe authors apply a cointegration and causality approach on a ten years database. The database includes by US state the density of high net worth individuals, the house price index, the homeownership rate, the number of housing units, and the privately-owned housing units authorized by building permits.FindingsThe results show a limited cointegration between the concentration of US wealthy households and the housing market. Thus, the authors can partly predict the fluctuations transmission from the housing market to wealthy households.Originality/valueThe authors suggest that our findings could be of interest to wealthy households, real estate professionals, and public authorities.