The Unassuming Economist

From a paper by Michael Lloyd:

“In April 2023, Jake Sullivan, in a speech to the Brookings Institute, formally announced the replacement of what had become known since the1990s as the Washington Consensus with a New Washington Consensus. This paper defines and briefly describes the original Washington Consensus. It goes on to describe and discuss in detail the New Washington Consensus and its implications. Finally, the paper outlines the potential Trump approach to this specific Biden legacy, whether or not acknowledged. The broad geoeconomic and geopolitical implications of the unwinding of what is likely to transpire are explored briefly in the context of the Trump Presidency.”

On cross-country:

• How cohesion policy helps solve Europe’s housing crisis – European Commission
• Stronger Asian currencies a mixed blessing for region’s property markets. While currency appreciation may provide relief for property investors, economies reliant on trade and tourism should proceed with caution – South China Morning Post
• NIMBYism and how to resolve it. A diagnosis and a solution. – The Works in Progress Newsletter

Working papers and conferences:

• Bubbling Up? What Consumer Expectations Reveal About U.S. Housing Market Exuberance – Dallas Fed
• El Clasico of Housing: Bubbles in Madrid and Barcelona’s Real Estate Markets – Research Institute of Applied Economics
• Tax Preferences and Housing Affordability: Explorations using a Life-Cycle Model – NBER
• Income Inequality, Mortgage Debt and House Prices – SSRN
• Distributional effects of monetary surprises across regional housing markets – SSRN

On China:

• China’s developers at risk as young home buyers walk away. There are signs of hope for the market but not enough to help developers out of their current predicament – FT

On Australia and New Zealand:

• [Australia] RBA interest rate cuts expected to drive home-buyer activity but economists doubtful of ‘boom market’. Though analysts still expect multiple rate cuts this year, expectations for major drops are evaporating – The Guardian
• [Australia] House prices and Trump tariffs: what does the RBA’s rate cut mean for you? – video – The Guardian

On other countries:  

• [Canada] In Canada’s residential mortgage market, it’s the Big Banks against everyone else – The Globe and Mail
• [Hong Kong] Cheaper private flats in Hong Kong don’t erase need for subsidised housing. Although home prices have fallen, subsidised housing’s raison d’être remains, with larger units much in demand – South China Morning Post
• [Ireland] Ireland’s main banks flag lack of appetite for house building – Reuters
• [Norway] Nordea Questions Norway’s Data on Faltering Home Construction – Bloomberg
• [Spain] Spain Orders Airbnb to Take Down 66,000 Rental Listings. The government is widening a crackdown on tourist rentals as it seeks to alleviate a painful housing crunch. – New York Times
• [United Kingdom] How to fix the UK’s housing crisis. For young adults, property shortages reinforce the feeling that life is a zero-sum game – FT
• [United Kingdom] Average asking price for home in Great Britain hits new high of almost £380k. Rightmove says figure has risen in May by 0.6% compared with April despite lower demand from new buyers – The Guardian
• [United Kingdom] Owners of second homes in Wales are having to sell up. That’s no disaster: it’s a godsend. Council tax hikes on holiday homes aren’t ‘anti-English’ or detrimental to tourism. This is about preserving embattled communities – The Guardian
• [United Kingdom] UK house prices rose by most since 2022 in March, official data shows – Reuters
• [United Kingdom] Kensington and Chelsea house prices fall to lowest since 2013. Sharp decline comes as prime London market suffers effects of higher property taxes, Brexit and non-dom changes – FT

From a paper by Anita Szymanska, and Małgorzata Zielenkiewicz:

“Growing income inequality currently poses a significant threat to sustainable development.
Hence, it is important to monitor this phenomenon, in particular to identify determinants favouring
the deepening of income inequality. One of the significant determinants in this respect is the declining
labour income share in national income. The theoretical justification of the presumption of a negative
relationship between the share of labour in the national income and income inequality has strong
logical foundations. Existing studies indicate, however, some ambiguities as to the strength of this
relationship and the existence of various factors cancelling this relationship. The following study
attempts to verify the existence, direction, and intensity of the relationship between the labour
income share and income inequality in a relatively homogeneous group of 33 OECD countries
studied in 1990–2018. The main hypothesis verified in the study is the assumption that there is
a negative relationship between labour share and income inequality. Our results show that the
relationship between the share of employees’ and self-employed workers’ income in the national
income and income inequality at the general level (i.e., in a group study of 33 countries in total) exists,
is negative and statistically significant, but has a very small share in explaining the behaviour of
income inequality.”

From a paper by Shuang Ma, Baoling Mo, and Xiaoyu Meng:

“We examine the impact of minimum wage increases on labor self-funded training by first constructing a theoretical model that explores the effects under both perfectly and imperfectly competitive market conditions. We then empirically analyze the impact using data on training enterprise registrations and household spending on training. Theoretically, we find an increase in the minimum wage is expected to suppress demand for low-skilled labor, leading affected workers to engage in self-funded training to compete for a limited number of job positions. Empirically, a minimum wage increase significantly boosts the number of newly registered training enterprises and household expenditures on skill training. Mechanism analysis reveals that a higher minimum wage increases labor costs for enterprises, leading them to raise skill requirements during recruitment, thereby encouraging job market participants to pursue self-funded skill training.”

On prices, rent, and mortgage:    

• Housing market shift: Foreclosures are creeping back up again. Foreclosures are up 40% year over year, but they’re still 13% below pre-pandemic 2019 levels. – Fast Company
• US Mortgage Rates Rise to Three-Month High, Slowing Home Demand – Bloomberg
• Americans are getting priced out of the American dream. As mortgage rates top 7% and home prices come in at $400,000, more and more Americans can’t afford to buy – Quartz
• In Q1 2025, 19% of Units Started Built-for-Rent were Single Family – Calculated Risk
• Home-Price Trends in Opportunity Zones Still Following National Patterns During First Quarter of 2025 – ATTOM
• Trump floats sale of government-controlled housing finance giants. Such a move would be a massive shift for the housing market. – Politico

On sales, permits, starts, and supply:    

• 3rd Look at Local Housing Markets in April – Calculated Risk
• Cost of Credit Eases for Builders and Developers – NAHB
• Gavin Newsom lays down the law on housing construction. The governor is wielding his power on an issue at the heart of California’s struggle to address soaring costs. – Politico
• Housing Affordability and Supply: Rising Inventory, But for Whom? – Realtor.com
• The Ultra Wealthy Are Riding Out the Market Chaos in Luxury Real Estate. Despite broader economic uncertainty, major markets like New York, Miami and Aspen have seen a surge in sales for homes priced at $10 million and up – Wall Street Journal
• Lawler: Early Read on Existing Home Sales in April – Calculated Risk
• Fresh Listings Tick Up—but Sales Lose Steam Over Stubbornly High Mortgage Rates – Realtor.com
• Single-Family Starts Down on Economic and Tariff Uncertainty – NAHB
• Single-Family Home Construction Drops as Tariff Turmoil Hits Homebuilders – Realtor.com
• Housing Starts Increased to 1.361 million Annual Rate in April – Calculated Risk  
• U.S. Housing Starts Ticked Up in April. The gauge of new residential construction rose 1.6% last month – Wall Street Journal
• US Housing Starts Increase on Pickup in Multifamily Construction – Bloomberg
• Tariffs Suppress New Construction in April, but Multifamily Projects Outperform – Realtor.com
• Flat Custom Home Building Trends – NAHB
• Flat Growth for Single-Family Built-for-Rent – NAHB
• California Home Sales “Retreat” in April; New Listings “Surge”. Active Inventory Highest Since October 2019 – Calculated Risk
• Slight Gains for Townhouse Construction – NAHB
• Spring Homebuying Season Sputters as Supply Jumps to 5-Year High, Existing-Home Sales Drop to 6-Month Low – Redfin

On other developments:    

• 5 Policies to Help Curb Housing Costs Immediately. These tools are effective ways to increase housing supply and homeownership opportunities – Pew
• US Housing Outlook – Apollo
• Housing market shift explained—and where it’s happening the fastest. The Pandemic Housing Boom was too much, too fast. Now, we’re in an affordability-constrained housing market—and it’s driving up the number of active listings for sale. – Fast Company
• How do you grade the Spring housing market? – Calculated Risk
• Single-Family Home Size Trending Higher – NAHB
• Zillow: Housing market to see first annual U.S. home price drop since 2011. Zillow projects that U.S. home prices will fall 0.9% between April 2025 and April 2026. Zillow economists had previously expected national home prices would rise this year. – Fast Company
• Georgia Is One of the Few Places Where Middle-Class Americans Can Afford an Average-Priced Home – Realtor.com  
• Home Depot shows that the housing market chill is hitting hard. $400,000 houses at 7% mortgage rates are weighing on the DIY trade. Just ask Home Depot – Quartz
• Income Growth Helps Mute Existing Affordability Constraints – NAHB