Housing costs have been increasing in most industrialized economies since WW2. The burden of rising housing cost is distributed unequally across income groups because the poor spend a larger fraction of their total consumption expenditures on housing …
The housing wealth-to-income ratio has been increasing in most developed economies since the 1950s. In this paper we provide a novel theory to explain this long-term pattern. We show analytically that house prices grow in the long term if i) the …