The Unassuming Economist

From a paper by Sergio De Nardis:

“The dichotomy between Purchasing Power Parities (PPPs) and national deflators in international comparisons of real variables (GDP per capita and productivity) has returned to center stage in the recent debate on the gap between the EU and the US. This dichotomy does not only concern comparisons between structurally different countries. It is also present, to a lesser but still significant extent, in Europe and with reference to the Italian economy. This paper shows how, over the period 2005-2023, Italy’s productivity performance compared to Germany and France is better if GDP is measured in PPPs (output side) rather than deflated with implicit prices from national accounts. The two types of measurement lead to dynamics that are difficult to reconcile. Examining the PPP-deflator gap, it is clear that this difference does not depend on the composition and structure of the weights used in constructing PPPs. Analysis of the expenditure categories that make up GDP and analysis of the specific household consumption items reveal a pervasive phenomenon, affecting both tradable and non-tradable products. It is argued that the structural similarity of economies lends robustness to PPPs. It is concluded that comparisons between countries under consideration based on data deflated with implicit prices from national accounts are less reliable, even in time series, than those based on PPPs due to the heterogeneous approaches of statistical offices in accounting for the quality of goods and services, the different granularity of underlying information, and the fixed structure of relative prices across economies.”

On cross-country:

• Why shares are the new bricks and mortar. Household wealth is flowing from property to stocks – The Economist
• Asian investors turn to housing, real assets as global tension shakes market confidence – South China Morning Post
• Combating the cost-of-living crisis and soaring housing prices – European Parliament
• House prices and rents continued to rise in Q2 2026 – Eurostat
• EU house prices surge, but rents soar in surprising hotspots – The Brussels Times
• Europe’s housing crisis rings alarm bells for the rest of us. Evictions and spiralling rents are the symptom, not the underlying disease of Europe’s rent crisis. – Financial Review
• Europe’s construction sector faces a period of weak growth. Europe’s construction volumes will keep growing but remain subdued. Infrastructure investment and Germany’s gradual rebound are drivers, while higher financing costs and geopolitical risks cap momentum. Housing permits have stabilised, signalling that a stronger residential recovery will have to wait – ING
• The 10 global housing markets most at risk of a bubble in 2026. Home prices in major cities have climbed far beyond local incomes. UBS ranks the 10 urban markets where bubble risk now runs deepest – Quartz

Working papers and conferences:  

• Conference: Housing markets – squaring supply and demand on November 17 – SUERF
• Reassessing the 2000s Housing Cycle After Two Decades of Research – NBER
• Supply Constraints Do Explain House Price and Quantity Growth Across U.S. Cities – Dallas Fed
• The Affordability Paradox: Why Cheaper Homes Are Harder to Finance – St. Louis Fed

On China:

• Wuhan joins major Chinese cities in shift towards completed-home sales – South China Morning Post

On Australia and New Zealand:

• [Australia] Australian home prices fall for sixth month, face worst slump in 30 years – Reuters
• [Australia] Australia’s housing slump could have a silver lining for its banks. Housing slowdown could result in lenders directing capital to more profitable places – FT
• [Australia] The most painful housing market plunge is here. And it’s not prices. Falling house prices are the new national obsession. But there’s another property market metric that spells real trouble for the broader economy. – Financial Review
• [Australia] Australia’s housing market is definitely in a downturn – but let’s put that in perspective – The Guardian
• [Australia] Australia is building a lot of new homes. But is the datacentre boom holding us back? – The Guardian

On other countries:  

• [Canada] The complexity of housing affordability – Bank of Canada
• [Canada] Bank of Canada Won’t Target House Prices With Interest Rates – Bloomberg
• [Canada] Canada is not close to restoring housing affordability, says central bank – Reuters
• [Canada] More turbulence hits Canada’s housing markets to kick off fall – RBC
• [Canada] Toronto Home Prices Fall for a Second Month as Loan Costs Rise – Bloomberg
• [Hong Kong] How a Hong Kong property investor still made US$30 million – after a 40% price cut – South China Morning Post
• [Singapore] Interest-only Research on grasping bureaucrats startles Singapore. It is more revealing about its academic culture than its civil service – The Economist
• [Spain] The right and wrong lessons to learn from Spain’s housing crisis. Evictions and spiralling rents are the symptom, not the underlying disease – FT
• [Spain] Spanish right wing votes down housing crisis plans as protest movement grows. Opposition lawmakers join forces to defeat proposals made by Socialist-led coalition after eviction of 87-year-old – The Guardian
• [Spain] ‘This can’t go on’: tens of thousands protest against housing crisis in Spain – The Guardian
• [Spain] How an 87-year-old Spanish woman became the face of the fight for affordable housing – explainer– The Guardian
• [Spain] Spanish Leader Calls for Elections, Riding Wave of Anger Over Housing Costs. Prime Minister Pedro Sánchez is gambling that outrage over rising rents will help his socialist party secure a majority – Wall Street Journal
• [Spain] Why Spain Is Holding an Early Election. Spain’s prime minister, Pedro Sánchez, dissolved Parliament on Monday, after months of spiraling crises. – New York Times
• [Spain] Spain’s New Protest Movement Is Putting Class Center Stage. The occupation of Madrid’s Puerta del Sol by housing protesters has brought back memories of the anti-austerity revolt that began in 2011. But where the Indignados used generic populist language, this new movement has a clear left-wing focus on class. – Jacobin
• [Spain] Spain’s Leader Is Betting His Government on the Housing Crisis – Time
• [Spain] Spain approves 21 urgent housing measures after protests ahead of snap election – AP
• [United Kingdom] UK house prices fall as higher mortgage rates ‘subdue’ market. Prospect of interest rate rises weighs on demand for properties – FT
• [United Kingdom] How to revive the UK’s zombified housing market. Can the new Help to Buy scheme end the horror? – FT
• [United Kingdom] Reform MP raises concerns about second homes – then buys one for £800,000. Sarah Pochin bought Anglesey property two days after writing to minister about impact of second home ownership on rural communities – The Guardian
• [United Kingdom] Higher mortgage rates inflict ‘pain’ on UK housing market. Slowdown comes as higher borrowing costs and economic uncertainty damp buyer demand, survey finds – FT
• [United Kingdom] Rate hike fears weigh on UK housing market, RICS says – Reuters

On prices, rent, and mortgage:    

• FHFA’s Q2 National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores – Calculated Risk
• Mortgage Rates Surge, Notching Largest Weekly Gain in Four Years. The rise to 7.28% follows the bond-market rout and deals another blow to a limping housing market – Wall Street Journal
• How 7% Mortgages Are Wrecking the Home-Buyer Playbook. With prices at record highs and inventory locked up, house hunters face dwindling financing options – Wall Street Journal
• US mortgage rates jump the most in four years in blow to housing market. Homebuilders and prospective buyers continue to face challenging market conditions with midterms looming weeks away – FT
• Beating the Headline Mortgage Rate: What Borrowers Still Control in a 7% Market – Realtor.com
• October ICE Mortgage Monitor: Annual home price growth was 1.4% in September. “Annual home price growth slowing for the first time in seven months” – Calculated Risk
• Mortgage Rates Rise as Treasury Yields Top 5% – NAHB 
• ARM Share Increased as Mortgage Rates Spiked – NAHB 
• The “Higher Rates, Higher Rent Doom Loop” Is a Big Problem for the Fed – Apollo
• Mamdani Promised To Freeze the Rent. Now His Rent Freeze Is in Court. A lawsuit alleges New York City’s Rent Guidelines Board broke the law by arbitrarily predetermining the outcome. – Reason
• Emerging Signs that Asking Rents are Near a Bottom – Calculated Risk
• Inflation Adjusted House Prices 3.8% Below 2022 Peak. Price-to-rent index is 11.0% below 2022 peak – Calculated Risk
• The U.S. cities where home prices have doubled in a decade. These 10 U.S. cities saw home prices double in a decade, driven by migration, tight supply and investor demand – Quartz
• The U.S. housing markets where homes sell fastest — and slowest. Sellers in some metros are waiting months for an offer. Best Interest Financial found 98 days separating the fastest and slowest markets – Quartz

On sales, permits, starts, and supply:     

• Private Residential Construction Spending Posts Broad-Based Gains in August – NAHB
• High Frequency Data: Recent Surge in Mortgage Rates Impacting Existing Home Supply and Demand. Purchase Applications Down 15% YoY; Single Family Inventory Increases – Calculated Risk
• Minneapolis 2040 Plan indicators point to stable rents, stalled development. Changes to land use policies appear insufficient to drive new housing production in a challenging development environment – Minneapolis Fed
• Remodeling Market Sentiment Remains Stable in Third Quarter Despite Headwinds – NAHB
• Institutional Investors Are Quietly Returning to the Housing Market – Realtor.com

On other developments:    

• As Boomers Start Turning 80, Their Contribution to Housing Demand Is Starting To Wane – Realtor.com
• Cities Across the US Are Turning Attics, Backyards and Garages Into Housing. ADUs are an increasingly popular answer to rental shortages, but their cost and complexity make the economics difficult. – Bloomberg
• My mortgage is a problem for the Fed, and for America. Homeowners like me are staying put, the market is frozen and affordability is as ugly as it was in the housing bubble – FT
• 2026 Realtor.com Generational Housing Succession – Realtor.com
• Warren Buffett’s Successor at Berkshire Hathaway Places Another Big Bet on Housing – Realtor.com
• 78% of U.S. homebuyers now use AI to help buy a home. Among U.S. real estate agents surveyed by ResiClub and Zoodealio, 78% of clients use AI tools in their homebuying/selling process. They most often use it to research neighborhoods, schools, or comps. – Fast Company
• Young Americans are getting crushed by housing costs — just in time for the midterms. A new survey finds 1 in 5 Americans spend half their pre-tax income on housing, and renters are bearing the worst of it – Quartz
• Mark Zandi: Fixing the housing market will take a long time, but there is a way to speed up the recovery – CNBC
• Homeownership Is Not a Solution to the Racial Wealth Gap – Roosevelt Institute  

On cross-country:

• To fix housing affordability, build more homes. Faced with rising mortgage costs, governments should resist stoking demand – FT
• How Europe’s housing crisis is fuelling a new movement. As soaring rents and house prices across Europe​ feed into the political discourse, campaigners believe they have a rare opportunity to force housing to the top of the agenda – The Guardian
• House prices up by 4.0% in the euro area – Eurostat  

Working papers and conferences:  

• Unlocking mortgage risk transfer: Why securitisation floor calibration and insurer access must move together – SUERF
• Property Rights Uncertainty, Prices, and Speculation: Evidence from China’s Housing Market – NBER
• Premiums or Peril – SSRN
• I Would Like the Value of My Home to Rise, While My Property Taxes Fall – Conversable Economist
• Event: Golden visas, house prices and electoral accountability on December 7 – LSE
• Fleeting Forbearance in a World of Persistent Financial Distress – New York Fed

On Australia and New Zealand:

• [Australia] Billions in collateral damage: The hidden cost of Australia’s housing slowdown – Reuters
• [Australia] Brisbane and Sydney hit hardest by falling house prices as 5.2% shaved from property values nationwide. Cotality data shows median house prices fell in September as interest rates hit borrowing capacity – The Guardian
• [Australia] Australia’s Property Boom Is Unraveling. How Bad Will It Get? – Bloomberg
• [Australia] Housing market on track for its steepest downturn in 40 years – Financial Review
• [Australia] Australian home prices fall for sixth month, face worst slump in 30 years – Reuters
• [New Zealand] New Zealand House Prices Fall to Lowest Since Early 2021 – Bloomberg

On other countries:  

• [Denmark] Interest-only mortgage debt approaching 50 per cent – Central Bank of Denmark
• [Germany] The German housing market’s weakness is showing up everywhere except in prices. Higher mortgage rates are back. Housing affordability is deteriorating. Demand for mortgage loans is weakening. Yet, German house prices continue to edge higher – ING
• [Hong Kong] Hong Kong must balance boosting public housing supply with other goals – South China Morning Post
• [Kenya] Kenyan Court Upholds President’s Unpopular Housing Levy – Bloomberg
• [Spain] Protesters demand Spanish government limit evictions after pensioner forced out – Reuters
• [Spain] Spain erupts in fury over housing after eviction of 87-year-old woman. Thousands take to the streets after Maricarmen Abascal forced to leave Madrid flat she had lived in for seven decades – FT
• [Spain] La vivienda en gráficos: más población, más turismo y poca construcción. Los precios han subido un 80% desde 2015. Desde entonces también ha crecido la población, han aflorado miles de pisos turísticos y los extranjeros no residentes han comprado más de 500.000 viviendas, mientras solo se han construido 850.000 – El Pais
• [Spain] Spain announces plan to ease housing crisis amid outcry over eviction of 87-year-old. Measures, which need to be approved in Congress, include extending ban on evictions of vulnerable people – The Guardian
• [Spain] Evicted Woman Set to Return Home as Spain Announces Plans to Fix Housing Crisis. The eviction of an 87-year-old set off protests in the country, which has an acute housing shortage. The government presented legislation to protect renters. – New York Times
• [Spain] Spain seeks to ban ‘vulture funds’ from housing market. Pedro Sánchez’s government responds to public outrage after 87-year-old was evicted by corporate landlord – FT
• [Spain] Spain’s Housing Reform. Mass protests over an 87-year-old’s eviction prompt new proposed legislation. – Foreign Policy
• [United Kingdom] Andy Burnham announces new homes scheme for first-time buyers. Exclusive: Policy initiative for England will help more young people on to property ladder, prime minister tells Guardian – The Guardian
• [United Kingdom] Burnham to revive Help to Buy scheme in bid to aid first-time buyers. Concern mounts among ministers that low housing construction volumes could hit growth forecasts – FT
• [United Kingdom] How London became the property market’s black sheep. Capital’s once-relentless property boom has gone into reverse – FT
• [United Kingdom] UK Mortgage Approvals Hit 32-Month Low as Loan Costs Bite – Bloomberg
• [United Kingdom] UK first-time buyer scheme lifts housebuilders, but success hinges on design – Reuters
• [United Kingdom] UK house prices fall as higher mortgage rates ‘subdue’ market. Prospect of interest rate rises weighs on demand for properties – FT

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.”