The Unassuming Economist

From a paper by Camilo Granados and Zhe (Jasmine) Jiang:

“Prudential regulation is designed for financial stability, yet the credit cycles it leans against fall unevenly across households—leaving its distributional footprint an open and contested question. Tracing that footprint across advanced, emerging, and developing economies over 1999–2024, we find that tighter macroprudential policy lowers income inequality, gradually and most clearly through the instruments that bear on banks rather than borrowers, and more so for inequality measured after taxes and transfers. To understand why, we build a closed-economy model with financial frictions and capital-skill complementarity in which prudential policy taxes the returns to intermediation. A tightening reduces inequality through three channels: it rebates revenue to households, cools the credit boom feeding financial rents, and compresses the skill premium accruing to high-income agents. Inequality moderation thus arises as a by-product of stability-oriented regulation—regulators tempering the distributional consequences of the credit cycle even when they only pursue financial stability.”

On prices, rent, and mortgage:    

• Housing Week Ahead: September Housing Data, Home Prices, Jobs Report – Realtor.com
• Home price shifts across America’s 50 largest metro housing markets. On a regional and local level, there’s a lot of variation. – Fast Company
• New homes now cost less than existing ones in one-third of major markets – Zillow
• Case-Shiller: National House Price Index Up 1.9% year-over-year in July. FHFA House Prices Up 2.6% Year-over-year in July – Calculated Risk
• Freddie Mac House Price Index Increased in August; Up 2.2% Year-over-year. Punta Gorda House Prices Down 18.2% from Recent Peak, Austin Down 15.8%, Cape Coral Down 14.6% – Calculated Risk
• Rising Mortgage Rates and Record Prices Leave Home Buyers Out of Moves. With prices at record highs and inventory locked up, house hunters are left with dwindling financing options – Wall Street Journal

On sales, permits, starts, and supply:     

• New Home Sales Increase to 684,000 Annual Rate in August. Median New Home Price is Down 15% from the Peak due to Change in Mix – Calculated Risk
• New Home Sales Rise as Affordability Challenges Continue – NAHB
• NAHB Remodelers: What the Data Says – NAHB
• Market Share of 5,000+ Sq. Ft. Homes Edges Higher in 2025 – NAHB
• America’s empty bedrooms are up for grabs. A 20th-century backlash banned a popular affordable housing option. It’s now seeing a revival. – Vox
• August Construction Job Openings – NAHB
• High Frequency Data: Purchase Applications Down 14% YoY; Single Family Inventory Increases – Calculated Risk
• AI Exposure Remains Relatively Low Across Most Construction Occupations – NAHB
• Home Flipping Returns Edge Up After Seven Quarters of Decline – ATTOM
• The astonishing gap between America’s fastest- and slowest-building cities. It shouldn’t take five years to build an apartment building. – Vox 

On other developments:    

• Why Did New Homes Stop Getting Bigger? New houses grew for forty years, then began shrinking in 2015 – Home Economics
• As Baby Boomers Age, Housing Demand Faces a Rising Headwind – Harvard Joint Center for Housing Studies
• Could Homeownership Reverse the Decline in Birthrates? Researchers looked back at the baby-boom era and found that federal mortgage programs played a part in the country’s population upswing after World War II. – New York Times
• Where Are the Articles About Young People Giving Up on Homeownership? – CEPR
• How did the post-pandemic migration surge affect labor and housing markets? – Brookings
• Portland Real Estate Is Such a Mess That All Housing Is Affordable Housing. Rarely has the Oregon city seen such a narrow price gap between market-rate and affordable units – Wall Street Journal
• US housing crunch puts private equity in midterm campaign crosshairs. FT analysis shows that institutional investors are being blamed for soaring costs – FT
• Down Payments Pick Up But Remain Lower than Previous Year – Realtor.com
• Fannie and Freddie: Single Family Delinquency Rates Increased Slightly in August. Freddie Mac Multi-Family Delinquencies at Highest Rate since Financial Crisis – Calculated Risk
• Where High Rents Drive People Into Poverty. A new study identified 10 locations where higher-than-average housing costs have impacted poverty the most. – New York Times
• The Housing Shortage Is a Major Driver of Poverty. New research identifies states where solving the housing shortage would significantly reduce poverty – Pew
• The Costs of Environmental Land-Use Regulation. Endangered Species Act protections reduced housing construction, including development in already-developed areas, suggesting that better-targeted regulation could increase housing supply while preserving habitat protections. – Cato

On cross-country:

• House prices survived the last interest-rate rise. Will they this time? Supports that shored up the housing market when borrowing costs last rose are gone – The Economist
• Why house prices may be in trouble. In a big serving of bad news, there are crumbs of comfort – The Economist
• UBS Global Real Estate Bubble Index 2026: Zurich and Tokyo lead global housing bubble risk. – UBS

Working papers and conferences:  

• Why housing reforms keep failing. Not all NIMBYs are alike. Dividing the most unreasonable ones from the rest might be the key to getting homes built. – Works in Progress
• AREUEA Policy Forum: Is the Time Right for the Manufactured Housing Sector to Deliver Affordable Homeownership Opportunities? On October 2 – AREUEA
• Too Much Yet Not Enough: Housing Segmentation and Household Consumption in China – IMF
• Quality, Inequality and Understanding Housing Markets – San Francisco Fed
• Zoning and the American Suburb – Philadelphia Fed 
• The Geography of Wealth: Shocks, Mobility and Precautionary Savings – Dallas Fed
• Homeownership and the Distributional Effects of Local Shocks – Dallas Fed
• Mortgage Lock-in: A Review of the Literature – Atlanta Fed
• Policy for short-term rentals: Balancing property rights and community preferences. Short-term rental restrictions do little to improve housing affordability and often impose sweeping burdens on responsible hosts, guests, and platforms. – Reason

On China:

• China home prices remain weak, keeping pressure on economy – Reuters
• Will fresh incentives give China’s housing market more than a short-lived rebound? – South China Morning Post
• Housing prices surge near new Huanggang Port as buyers eye ‘dual-city’ lifestyle – South China Morning Post

On Australia and New Zealand:

• [Australia] Half of young Australian adults now live with their parents – and it’s not hard to see why. Housing costs are up with renters worst affected and financial stress is also growing, according to the largest survey of its type – The Guardian

On other countries:  

• [Hong Kong] Why a hawkish US Fed won’t derail Hong Kong’s property recovery – South China Morning Post
• [Ireland] Corporate landlord credits profit surge to housing shortage. Firm backed by French insurer Axa nets €24m profit in part from ‘significant undersupply’ in Irish housing market – The Irish Times
• [Germany] Far-left party wins Berlin election, pledging to nationalise housing – Reuters
• [Spain] El precio de la vivienda modera el crecimiento en el 2T – CaixaBank
• [United Kingdom] UK lenders raise mortgage rates as inflation fears intensify. Banks and building societies have added to recent rate increases across their-fixed rate home loans under market pressure – FT
• [United Kingdom] Housebuilders aren’t the only ones who benefit from ‘Help to Buy’. A new equity loan scheme could help people get on the property ladder, though the government might struggle to afford it – FT
• [United Kingdom] Thirty years of buy-to-let: does it have a future? Rents and tenant demand are rising, but landlords are under increasing pressure. – FT

On prices, rent, and mortgage:    

• US labor market on solid footing; rising mortgages pressuring housing sector – Reuters
• Fixed-rate mortgages are rent control by stealth – Reuters
• Rising mortgages are muddling the GOP’s housing message – Politico
• The Hidden Gem Short-Term Rental Markets of 2026: Where Owners Are Maximizing Returns – Realtor.com

On sales, permits, starts, and supply:     

• Single-Family Starts Rebound but Market Challenges Persist – NAHB
• Building More Starter Homes Could Expand Latino Homeownership – AEI
• US single-family housing starts rebound in August; building permits fall – Reuters
• Bedrooms in New Single-Family Homes in 2025 – NAHB
• Q2 2026 Remodeling Market Update: Labor and Nonlabor Input Costs – NAHB
• “Architecture firm billings continued to decline in August”. Multi-family billings negative for 47 of last 49 months – Calculated Risk
• High Frequency Data: Purchase Applications Weak, Single Family Inventory Increases – Calculated Risk
• Single-Family Detached Homes Still Dominate Among the 55+ Population – NAHB

On other developments:    

• A Long-Term View on the Costs of Shelter – FED
• Blue Cities Are Dense Cities. Their challenges have more to do with the ‘dense’ part than the ‘blue’ part – Home Economics
• Apartment Landlords Have a $2 Trillion Debt Problem That Is Only Getting Worse. Property investors borrowed record sums at historically low rates. As the bill comes due and interest rates rise, ‘the chickens are coming home to roost.’ – Wall Street Journal
• Part 1: Current State of the Housing Market; Overview for mid-September 2026 – Calculated Risk
• Wood Framing Continues to Dominate Single-Family Construction – NAHB
• Two housing markets diverge in the Washington area. The pandemic buying frenzy is subsiding, except for the most expensive houses. – Washington Post
• Metro Report Cards: Top and Bottom of the Class for Homebuilding and Affordability – Realtor.com
• Part 2: Current State of the Housing Market; Overview for mid-September 2026 – Calculated Risk
• Home Improvement Spending Has Shifted Away from DIY – Harvard Joint Center for Housing Studies 
• How local homeowners insurance market stress impacts urban and suburban housing markets – Brookings

From a paper by Domenico D’Ausilio & Massimiliano Cerciello:

“This paper investigates the relationship between monetary policy and income inequality across 32 OECD countries over the period 1995 to 2023. We estimate a dynamic panel model using the system Generalised Method of Moments estimator, accounting for persistence in inequality, unobserved country heterogeneity, and potential endogeneity between monetary policy and distributional outcomes. To capture non-linear transmission, the short-term nominal interest rate enters the model in both linear and quadratic form. Income inequality is measured through the Gini index and the income shares held by the top 10%, middle 40%, and bottom 50%, distinguishing between gross and net income to account for fiscal redistribution. The results show that monetary policy tightening and sufficiently large monetary easing are both associated with lower inequality, mainly through a decline in the top income share and an increase in the bottom 50% share. Smaller rate cuts, by contrast, are associated with higher inequality. These patterns suggest that the distributional effects of monetary policy vary with the intensity of the policy stance and the segment of the income distribution considered, while fiscal redistribution attenuates but does not eliminate the underlying non-linear relationship.”