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Housing market forecasts via stock market indicators

Author

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  • Mittal, Varun
  • Schaposnik, Laura

Abstract

Reliable forecasting of the housing market can provide salient insights into housing investments. Through the reinterpretation of housing data as candlesticks, we are able to utilize some of the most prominent technical indicators from the stock market to estimate future changes in the housing market. By providing an analysis of MACD, RSI, and Candlestick indicators (Bullish Engulfing, Bearish Engulfing, Hanging Man, and Hammer), we exhibit their statistical significance in making predictions for USA data sets (using Zillow Housing data), as well as for a stable housing market, a volatile housing market, and a saturated market by considering the data-sets of Germany, Japan, and Canada. Moreover, we show that bearish indicators have a much higher statistical significance then bullish indicators, and we further illustrate how in less stable or more populated countries, bearish trends are only slightly more statistically present compared to bullish trends. Finally, we show how the insights gained from our trend study can help consumers save significant amounts of money.

Suggested Citation

  • Mittal, Varun & Schaposnik, Laura, 2022. "Housing market forecasts via stock market indicators," MPRA Paper 115009, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115009
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    File URL: https://mpra.ub.uni-muenchen.de/115009/1/MPRA_paper_115009.pdf
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    References listed on IDEAS

    as
    1. Daiki Matsunaga & Toyotaro Suzumura & Toshihiro Takahashi, 2019. "Exploring Graph Neural Networks for Stock Market Predictions with Rolling Window Analysis," Papers 1909.10660, arXiv.org, revised Nov 2019.
    2. Kyung-Hwan Kim & Chang-Moo Lee & Young-Man Lee, 2014. "Rental housing system and housing market volatility: monthly rent-based vs. asset-based systems," Chapters, in: Susan Wachter & Man Cho & Moon Joong Tcha (ed.), The Global Financial Crisis and Housing, chapter 12, pages 296-312, Edward Elgar Publishing.
    3. Yi Liang & James Unwin, 2021. "COVID-19 Forecasts via Stock Market Indicators," Papers 2112.06393, arXiv.org.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    housing market; trend study; stock market indicators; candlestick analysis; Heikin-Ashi candlestick analysis; RSI; MACD; Bearish Engulfing; Bullish Engulfing; Hammer; Hanging Man; Dark Cloud Over;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G0 - Financial Economics - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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