Munich Personal RePEc Archive

Housing prices and transaction volume

Arslan, Yavuz and Akkoyun, H. Cagri and Kanik, Birol (2011): Housing prices and transaction volume. Published in: The Central Bank of the Republic of Turkey Working Paper Series , Vol. 11, No. 12 (12 March 2012): pp. 1-17.

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We use annual, quarterly and monthly data from the US to show that the correlation between housing prices and transaction volume (number of existing houses sold) differs across different frequencies. While the correlation is high at low frequencies it declines to the levels close to zero at high frequencies. Granger causality tests for different frequencies show the way of causality in housing market goes from transactions to housing prices. Our findings provide a litmus test for the existing theories that are proposed to explain the positive correlation between housing prices and transaction volume.

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