Can the BH&J Buy vs. Rent Index Anticipate Housing Price Movements? Article

Johnson, KH, Beracha, E, Feng, W. (2020). Can the BH&J Buy vs. Rent Index Anticipate Housing Price Movements? . 29(1), 20-33. 10.1080/10527001.2020.1831827

cited authors

  • Johnson, KH; Beracha, E; Feng, W

authors

abstract

  • This paper investigates whether and to what extent the Beracha, Hardin, and Johnson Buy vs. Rent Index (BH&J Index) is able to anticipate future housing price movements. The BH&J Index is based on a model introduced by Beracha and Johnson (2012) in which a low index value is associated with a buy recommendation and a high index value is associated with a rent recommendation. The results of our analysis reveal a negative relation between the BH&J Index value and future housing price changes at the metropolitan level, which is consistent with the buy or rent recommendation of the index. The negative relation between the BH&J Index value and future housing price changes is statistically significant, economically meaningful, and is particularly relevant for medium-term holding periods.

publication date

  • January 1, 2020

Digital Object Identifier (DOI)

start page

  • 20

end page

  • 33

volume

  • 29

issue

  • 1