An IMF study found that economic fundamentals such as growth in GDP, growth in working age population, and interest rates explained less than half of the house price changes seen in the countries studied.
Another study found economic fundamentals such as lower interest rates, relaxed lending standards, and higher incomes explained about half of the increase in the U.S. house price-rent ratio between 1995 and 2006.
National house prices are determined to an important degree by “non-fundamentals” including national housing and mortgage policies, and future price expectations, not just economic fundamentals.
76 Secrets of U.S. Home Ownership – Table of Contents