During 2006, one of the largest population segments, roughly 76 million people, those born between 1946 and 1964, commonly known as “Baby Boomers,” began to turn 60 years old. In fact, according to Summary and Highlights of the American Housing Conference, every 8 seconds someone turns 60. As it is, baby boomers make up about 37% of all U.S. households and 28% of the total population. And, as can be imagined, such a large segment will definitely have gargantuan impact on the economy, generally, and the housing market, specifically. In many ways, the baby boomers have dominated the real estate market since the 1970’s when they bought their first homes, again in the 1980’s when they began their families and bought larger, but relatively inexpensive houses, and again the 1990’s when they built large houses, more expensive houses with more amenities.

In terms of further work on the global perspective, Crooks and Despeignes (2002) chart the growth of house prices in Europe, America and parts of Asia, noting increasing rates not seen since the 1980s. In Europe, the gains have been particularly strong in countries that have experienced a sharp fall in interest rates as a result of joining the euro; for example, Spain with growth of 18% and Ireland 8%. However, house prices have not been strong everywhere. In Germany, Japan and Hong Kong, prices have been stagnant or falling and the hot spots are widely spread from Sydney to Stockholm. House prices have risen by 18% in the UK and in Australia by 17% over the year.

Interest rates are an important factor in driving house price performance; however, Khatri (2003) notes that differences in mortgage market structures mean that for some countries, short-term interest rates play a greater role in housing demand than long-term rates. Nevertheless, despite the prevalence of different housing finance systems and rates of owner occupation, those countries with the strongest labor markets and wage growth, and relatively larger falls in interest rates, experienced the most rapid rise in house prices in recent years.

Conclusions and Ideas for Future Research

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