| Abstract: | We present evidence that in the USA, the relative price of housing exhibits secular growth and that its growth rate is a stationary series. The ratio of the value of house stock to either consumption or GDP is also stationary. We develop a two‐sector neoclassical growth model with housing that is consistent with these facts. Among the long‐run determinants of the growth of housing prices and housing stock per capita are factor intensities, rates of technological progress in both the housing and non‐housing sectors, and the excess of population growth over land growth. We also study the model's transitional dynamics. |
