The Unassuming Economist

On prices, rent, and mortgage:    

• Mortgage Applications Retreats Further in April – NAHB
• May ICE Mortgage Monitor: “Annual home price growth was 0.9% in April” – Calculated Risk

On sales, permits, starts, and supply:     

• Big U.S. housing starts slide offers growth warning – Reuters
• 2nd Look at Local Housing Markets in April – Calculated Risk
• Spring Housing Market Faces Crossroads With ‘Make or Break’ Trend in New Listings – Realtor.com
• Residential Building Worker Wages Remain Soft in Early 2026 Amid Slower Housing Activity – NAHB
• NAR: Existing-Home Sales Increased Slightly to 4.02 million SAAR in April. Median House Prices Increased 0.9% Year-over-Year – Calculated Risk
• Existing Home Sales Edged Up Slightly in April – NAHB
• New-Construction Insights: Urban New Builds Are Scarce and Expensive – Realtor.com
• Housing Market’s Spring Is Shaping Up as a Bust After April Sales Were Flat. Existing-home sales edged up 0.2%, well below economist expectations and extending the industry’s long slump – Wall Street Journal
• Residential Construction Input Prices Move Higher In April – NAHB
• The spring housing market is off to a bad start. Sales of existing homes rose just 0.2% in April to a 4.02 million annual rate, far below analysts’ expectations of more than 3% growth – Quartz

On other developments:    

• April 2026 Hottest Housing Markets – Realtor.com
• Mapped: Where Housing Takes the Biggest Share of Income – Visual Capitalist
• Mapped: Where Young Americans Still Own Homes – Visual Capitalist
• How Measurement Choices Shape the Housing Debate—and the Charts in the President’s Economic Report – Cato Institute
• Twin Cities region misses its housing marks. For the first time since a set of housing affordability goals were established in 2022, the Twin Cities region failed on all three measures – Minneapolis Fed
• Wichita Is a Rare Mecca of Affordability for America’s New Middle Class. Duplex boom is attracting middle-income earners to the Midwestern city – Wall Street Journal
• Roosevelt Institute Expands Housing Policy Work with Residency. Applications open for emerging leaders generating bold policy ideas to expand housing supply – Roosevelt Institute
• The Return for These Investors Isn’t Money. It’s More Affordable Housing. – Seattle Times  
• Trump calls on Congress to pass Senate’s housing bill. The president had previously stayed out of a cross-chamber dispute over housing affordability legislation. – Politico
• ‘We’ve been pretty straightforward’: White House draws a line on housing bill. The White House is mounting pressure on the House to pass the Senate’s housing bill as-is, but the lower chamber is bucking the directive for now. – Politico
• House Republicans press ahead on reworking Senate housing package. GOP lawmakers are continuing to work on an embattled housing bill, even after the president said he wants the Senate’s version passed. – Politico
• Rising Housing Costs Keep First-Time Buyers on the Sidelines. The effects of the war in Iran have raised mortgage rates and lowered consumer confidence, making it even harder for house hunters. – New York Times 
• Is It Too Expensive to Sell a House? Millions of Americans are holding onto empty homes, fearing the tax hit a sale would bring. – New York Times
• Rising Housing Costs Keep First-Time Buyers on the Sidelines. The effects of the war in Iran have raised mortgage rates and lowered consumer confidence, making it even harder for house hunters. – New York Times
• Best U.S. cities for first-time homebuyers in 2026, ranked by affordability. First-time buyers in the U.S. now close at the oldest age on record. Realtor.com ranked communities to find the 10 best markets for 2026 – Quartz
• San Francisco’s Luxury Housing Boom Is a Warning – Bloomberg
• Rent Is Swallowing Household Incomes. Plus, how politicians are pitching affordability. – New York Times

From a paper by Karan Bhasin, and Prakash Loungani:

“This paper introduces a hierarchical Large Language Model (LLM) framework for the automated identification of narrative fiscal shocks. We develop a multi-stage architecture to extract austerity episodes from IMF Article IV reports (2004–2020) for 17 OECD countries. Relative to manual coding, our approach improves replicability and auditability by generating a documented sequence of classification steps. Benchmarking against Adler et al. (2024), we find that the LLM-based classification aligns closely with the narrative benchmark, while differing on a small subset of episodes. Local projection estimates indicate that LLM-identified shocks are associated with smaller estimated multipliers than the narrative benchmark, with the difference linked in large part to differences in shock persistence and endogeneity.”

From a paper by Chandan Sethi, and Bibhuti Ranjan Mishra:

“This paper examines whether inflation targeting (IT) policies improve the macroeconomic performance of 28 Asian economies from 1998 to 2023. Specifically, it assesses the impact of IT on inflation, GDP growth, exchange rates and unemployment. The study employs two econometric methods: propensity score matching (PSM) and panel-corrected standard errors (PCSE). The findings suggest that adopting an IT regime can significantly reduce inflation and exchange rate volatility. However, IT has no significant effect on GDP growth. In contrast, results reveal a positive, statistically significant impact on unemployment, suggesting potential short-run labour-market trade-offs associated with disinflationary policies. These findings contribute to the ongoing debate on the effectiveness of IT by highlighting that its impact on real economic variables may vary across estimation approaches and underlying assumptions.”

From a paper by Jan Čapek | Jakub Chalmovianský | Vlastimil Reichel:

“This study systematically evaluates forecasting performance of 11 Dynamic Stochastic General Equilibrium (DSGE) and 2 Bayesian Vector Autoregression (BVAR) models during recessions and expansions in the US and the euro area. Results show that no single model dominates: parsimonious models perform well in stable periods and at short horizons, while richer DSGE specifications with financial frictions, flexible inflation targeting, or labor market dynamics improve forecasts during recessions. BVARs excel in interest rate forecasting, especially in expansions. Crisis‐specific extensions, such as COVID‐related shocks, yield temporary gains. Forecast accuracy depends on the economic state, variable, horizon, and evaluation metric, underscoring the need for a diversified, context‐dependent modeling toolkit.”

From a paper by Georgios Chortareas, Anastasios Evgenidis, and Apostolos Fasianos:

“This paper explores whether the transmission from monetary policy to income inequality may depend on the adoption of Inflation Targeting (IT) regimes. Using an interacted panel VAR, we find that expansionary monetary policy shocks reduce income inequality in countries that have switched to IT regimes. In contrast, in non-IT regimes the same shock is associated with a short-lived increase in income inequality. A decomposition of transmission channels indicates that the employment channel is the primary equalizing mechanism under IT, as expansionary shocks generate stronger improvements in labor market conditions. The financial channel operates in the opposite direction but is quantitatively smaller. We further show that the inequality-reducing effects of monetary policy are not replicated by other institutional features often associated with credibility, such as central bank transparency or central bank independence. Our findings are robust to alternative identification schemes, broader classifications of IT regimes, controls for self-selection into IT adoption, and to conditioning on different inflation environments.”