In this paper, we evaluate the forecasting ability of 145 indicators and ten types of forecast combination schemes to predict housing prices and rents in 71 German cities. We are interested in whether local business confidence indicators facilitate substantial improvements of the forecasts,...

The housing wealth-to-income ratio has been increasing in most developed economies since the 1950s. We provide a novel theory to explain this long-term pattern. We show analytically that house prices grow in the steady state if i) the housing sector is more land-intensive than the non-housing...