Abstract
In the last decade, Texas has experienced increasing immigration and tremendous economic growth. The housing market of Texas, benefiting from the state's expansion, has caught the attention of a wide range of investors. An accurate prediction of future housing prices is crucial for investment decisions. The VAR model is a multivariate time series model that reflects how different inner-correlated variables influence each other, and it is widely used in housing price studies. This article will use the VAR model to forecast Texas housing prices for the next decade and compare the results with the forecast from the ARIMA model. Both models show an increasing housing price trend for the next decades, and the VAR model shows a significant correlation between housing prices and household income. Thus, it is reasonable to recommend investments in Texas real estate property. On the other hand, this article also believes that the increasing housing prices could pose challenges for lower-income households and first-time buyers, and the government should develop policies that resolve the affordability issue.
Published Version
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