An Optimal House Price Prediction Algorithm: XGBoost

Abstract

An accurate prediction of house prices is a fundamental requirement for various sectors including real estate and mortgage lending. It is widely recognized that a property value is not solely determined by its physical attributes but is significantly influenced by its surrounding neighbourhood. Meeting the diverse housing needs of individuals while balancing budget constraints is a primary concern for real estate developers. To this end, we addressed the house price prediction problem as a regression task and thus employed various machine learning techniques capable of expressing the significance of independent variables. We made use of the housing dataset of Ames City in Iowa, USA to compare support vector regressor, random forest regressor, XGBoost, multilayer perceptron and multiple linear regression algorithms for house price prediction. Afterwards, we identified the key factors that influence housing costs. Our results show that XGBoost is the best performing model for house price prediction.