Many expect to move to smaller houses, condominiums, or retirement communities as they get older. These individuals, who plan to “downsize” their housing over time, are truly better off when house prices increase, and any standard theory would predict that they will increase their consumption.
At the same time, many individuals who do not currently own homes--or who own small homes--likely plan to purchase homes and increase their consumption of housing services in the future. These “upsizers” are worse off when house prices increase, and they will reduce their  BIS Review 100/2001  3  consumption of non-housing goods and services.