How Macroeconomic Issues Affect the Housing Industry

Cowan D & Marsh. 2001. A Two Steps Forward: Housing Policy into the New Millennium. Policy Press

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

The City of Toronto is recognized for its highest market-based economy and housing costs in the country (Wellesley Institute, 2014). In a market-based economy, the market decides the major share of housing. Today, the market of housing is burgeoning on most expensive

Not only people of color have a lower incomes in the white counterparts, they are less able to compete in the housing market due to persistent discrimination. Well it took several decades for the FHA to change but it's guidelines as well as its mode of operation, the legacy of thousands communication and, indeed, various ongoing discriminatory practices, Instagram fact have American life. Much more often than not, neighborhood to get dies by occupancy by one we should go or another. Moreover, that TVs and conscious decisions that have created these pad and just a while he practice

To better understand the real impact macroeconomics has in an economy or a particular industry, it is better to define what macroeconomics is and what it attempts to study. Contrary from microeconomics which studies the impact that individuals or companies have in a local economy, macroeconomics focuses on the behavior of the economy or industries as a whole, in a national or global perspective. (Investopedia.com, 2015)

Seven years removed from recession, American homeowners are beginning to rebound from the hold created by the housing crisis. Throughout history, the housing market has been a key indicator of financial stability and the real economy. Housing booms and bust are often reflections on the mortgage market, labor mobility and consumer spending. With interest rates near zero, at the moment, the real estate market has experienced a steady rise in new and existing home sales, prices and mortgages. Likewise, developments in the U.S. housing market have been instrumental to gains in home improvement spending. In 2015, home improvement retailers, Lowe’s and Home Depot have delivered better than expected results thanks to the housing market recovery. Despite what may seem like a modest recovery, there remains significant concerns that the recovery will be short lived. Some evidence would suggest that interest rates, a flood of foreign investments, income inequality and the same culprits from 2008 are re-inflating a housing bubble.

This tendency to promote smaller scale developments creates higher prices for residential housing, in particular those properties that would be sought after by first time home buyers,

The housing market has been facing the outcome of a decline of community growth for homeowners refinancing their mortgages due to the increase of rising surroundings foreclosure rates. The rise in vacant homes have led to lower revenues for communities because the government is failing to support completely and come to the aid of existing struggling homeowners and persevering the opportunities for future owners. City managers, mayors, and other elected public officials have a moral obligation ask the federal government for assistance in order to alleviate the crisis. The real estate market can stabilize if the government will pass bills, which include tax provisions to help curb the rise in foreclosures. The situation will not get any better if homeowners do not advocate for reform in lending practices and by allowing the government to ignore the pleas for their homes not to be ended up on the auction block.

Imagine starting off with a young family, relatively average income and a dream to own a home meant for the magazines. This dream became a reality in the new millennium when interest rates in the United States were at an all time low. Suddenly that colonial style home, with the white picket fence was just at the tips of consumers’ fingertips. Mortgages were being handed out as if they were an everyday commodity with minimal screening, therefore the American dream eventually faulted and came back down to a shaky reality.

How does the home building industry affected by the economy? This is what we will be exploring in the paper. There are different areas within the industry that can be affected. First we will look at supply and demand. Then continue to the positive and negative externalities, and how wages inequality is measured. Then finally, we will look at the monetary and fiscal policies that affect the housing industry. With the information we will have a better understanding of how the home building industry is affected.

David Cannington, senior economist, ANZ Research says the housing market is a significant player in shaping the economic outlook. He says the recent slowdown was a result of two factors: weakness in sales and slower auction clearance rates.

Firstly, I will deal with the factors which can affect the demand for houses in an economy.In many people’s opinion, the single most important factor which affects demand for housing is interest rates. This belief is held because for most people, the cost of purchasing a house is so great that the only way they can afford to do so is to take out a mortgage from a bank or building society. One of the main conditions that banks and building societies apply to mortgages is that during the course of the mortgage, interest will be paid on the loan. Although it is possible to have a fixed rate mortgage - where the rate of interest which will be paid is fixed at a constant level throughout the mortgage- most mortgages are variable rate

The housing industry in USA is on rapid growth to capture the new and the raising opportunities (Harvey Brenner, H. 2011). Therefore, this paper focuses on the most common factors that influence the selling prices of the houses in USA. Again, the above-listed research questions have led to the following research objectives:

The housing market, specifically domestic housing is seen to be large and very fragmented around Britain. The housing market is similar to any other markets which concludes with the buyers agreeing with the sellers on a certain price for the property. For the housing market the supply will always stay inelastic as prices are always changing. There are a number of different variables which can effect the demand and supply of the housing market such as the buyers ideal location of a home, somewhere which is suitable for raising a family or practicality reasons such as work. Most households need homes, which gives us an indication of how much households are willing to pay looking at their income and by the accessibility of

First, the nature of home demand whereby a firm can get a clear picture and benefit from the understanding of buyer needs. Second, the size and pattern growth of home demand that can anticipate international and domestic needs. Third, the mechanisms by which a nation’s domestic preferences are submitted to foreign markets. The most crucial attribute of home demand are those that facilitate initial and ongoing stimulus for investment and innovation and moreover, the ability for competing over time in more sophisticated segments (Porter M. E., 1990). Based on all above, the impact of demand conditions on competitive advantage also depends on the other diamonds part as well.