Changes in house prices affect household consumer spending through a housing wealth effect.

Is it true that changes in house prices affect household consumer spending through a housing wealth effect?

Partly. Several studies and surveys partially support a housing wealth effect on consumption, including a survey finding a strong wealth-spending link and UK and European evidence of house-price effects on spending. However, other micro-level work finds the pure wealth effect plays at best a minor role, with spending responding mainly through borrowing-collateral channels, so the evidence is mixed and only partial.

Verdict: CONTESTED PARTIAL · 6 sources for, 2 against · Last checked 3 Oct 2026

The private library was unavailable for some searches in this check. Missing library results are not evidence against the claim.

Wealth effect. (n.d.). en.wikipedia.org. https://en.wikipedia.org/wiki/Wealth_effect

Suari-Andreu, E. (2021). Housing and household consumption: An investigation of the wealth and collateral effects. doi.org. https://doi.org/10.1016/j.jhe.2021.101786

Paiella, M. (2008). The Stock Market, Housing and Consumer Spending: A Survey of the Evidence on Wealth Effects. doi.org. https://doi.org/10.2139/ssrn.1162222

How do house prices affect consumption? Evidence from micro data. (2005). doi.org. https://doi.org/10.1016/j.jmoneco.2005.10.016

The Effect of Housing Wealth Losses on Spending in the Great Recession - PMC Lock. (n.d.). pmc.ncbi.nlm.nih.gov. https://doi.org/10.1111/ecin.12753

Feeling Rich, Feeling Poor: Housing Wealth Effects and Consumption in Europe. (2023). elibrary.imf.org. https://doi.org/10.5089/9798400261367.001

Monetary Policy Transmission, House Prices and Consumption. (2013). doi.org. https://doi.org/10.1057/9781137334152_4

House Price Fluctuations: The Role of Housing Wealth as Borrowing Collateral. (n.d.). cir.nii.ac.jp. https://doi.org/10.1162/rest_a_00323