In order to explore the main driving factors of housing prices in China, we used the data of housing prices in China's 116 cities, and analyzed the impact of 3 factors including housing demand, supply and cost on housing prices based on the method of Gray Relational Degree. The results show that: The land price has the most evident driving effect on the housing price differentiations in China's cities; the driving effects from population aggregation and residential land supply are also very remarkable; the supply-demand theory and cost theory could be adopted simultaneously in explaining the housing price differentiation phenomenon in China.