Determine the Relationship Between House Prices and Local Income Level
Real estate market is one of the most important fractions of the financial industry, and housing price has always been the spotlight of discussion for centuries. In this paper, we want to discuss the relationship between housing prices and the local personal income per capita. The other explanatory variables including price level, GDP growth rate (compound over 2 years), and population net flow of a specific area. The discussion will be cross-sectional comparing data of different Metropolitan Statistical areas. Since the Housing Price Index from Federal Housing Finance Agency was calibrated in 2000, so we chose a recent year 2018 where all data were collected and still considered closely related to current situation. Through this study, a weak positive relationship between personal income per capita was displayed with linear regression model.