Housing market forecasts via stock market indicators

Varun Mittal and Laura Schaposnik

MPRA Paper from University Library of Munich, Germany

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.

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 (search for similar items in EconPapers)
JEL-codes: C10 G0 G20 (search for similar items in EconPapers)
Date: 2022-10-16
New Economics Papers: this item is included in nep-fmk and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:115009

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