What Causes Housing Price Decline? A Fuzzy Set Qualitative Comparative Analysis Based on 267 Prefecture‐Level Cities in China

ABSTRACT The stability of housing prices is crucial to both macroeconomic stability and people's livelihoods. In order to explore the root causes of the decline in China's real estate prices and formulate targeted policies for stabilizing housing prices, this study adopts a configuration perspective and employs the fuzzy set Qualitative Comparative Analysis (fsQCA) method. Taking the housing price changes of 267 prefecture‐level cities in China from 2021 to 2023 as the research object, this paper identifies the key combined paths influencing the downward trend of housing prices. The research findings reveal four core configuration paths for housing price decline: cost relief type, cost reduction adaptation type, supply‐demand contraction type, and supply‐demand recession type. All four paths include a high decline rate of land prices, indicating that the decrease in land prices serves as a critical foundational condition for the decline in housing prices. The interaction between the supply and demand sides determines the market mechanism underlying the housing price decline: when demand is strong, the supply side proactively adjusts its structure and reduces costs by leveraging the decrease in land costs to achieve active price adjustment; when demand is weak, the supply side is forced into passive price discounts due to inventory backlogs and capital chain pressures. Financial support, functioning as a lubricant, amplifies elasticity on the demand side and mitigates risks on the supply side, yet it cannot reverse the fundamental trends of demand recession and supply clearance.