Factors that mean rural housing is the least affordable in the UK include better views, open space and quietness, says the report.
Their effect on inflating the value of properties and influencing the type of homes that are built is pushing rural youngsters and low earners towards urban areas, it argues.
The research was undertaken by Dr Felix Hammond from the University of Wolverhampton and Dr Jessica Lamond from the University of the West of England.
It was carried out on behalf of the Royal Institution of Chartered Surveyors, and launched at a private briefing for Defra civil servants.
"The point that rural housing is the least affordable in the UK is firmly made in both the academic and policy research literature," says the report.
"This is leading to a rapid drift of young people in particular and low income earners out of rural areas into urban communities."
Basing housing policies on on aggregate prices at local authority level will mask real rural housing shortages and the need for local housing, the report concludes.
This implies that understanding of local housing need requires detailed study within each local authority, it adds.
"Targeting of national funding to achieve rural housing goals should therefore be formed from an amalgamation of local studies," the report says.
More affordable housing could be encouraged by focusing on entry level housing in villages, hamlets and isolated areas based on anticipated household formation, it suggests.
Valuers can use urban comparables to value rural property in adjacent villages in the study area but should be aware of the small differences in emphasis in amenity values.
In general, valuers should be aware that urban and rural markets show variation in valuation of property characteristics, the report adds
Copies of the report (registration required) are available by clicking here.