The Unassuming Economist

On prices, rent, and mortgage:    

• Case-Shiller: National House Price Index Up 3.4% year-over-year in March – Calculated Risk
• Case-Shiller Home Price Index Increases 3.4% in March – Realtor.com
• U.S. House Prices Rise 4.0 Percent over the Prior Year; Up 0.7 Percent from the Fourth Quarter of 2024 – FHFA
• Inflation Adjusted House Prices 1.0% Below 2022 Peak. Price-to-rent index is 8.1% below 2022 peak – Calculated Risk
• House Prices Outpaced Income Growth Over the Past 40 Years – statista 
• The luxury housing market is cracking — and tech-heavy cities are getting hit hardest. The affluent are growing skittish because of layoffs and rising uncertainty – Quartz
• Housing market shift: 80 major markets that are seeing falling home prices. Among the 300 largest metro-area housing markets, 80 are seeing falling home prices on a year-over-year basis, according to ResiClub’s monthly analysis. – Fast Company
• Home Prices Dip for the First Time Since March as Housing Market Cools – Realtor.com
• 94% Multifamily Built-for-Rent Share – NAHB
• Interest rates, term premia, and mortgages…They’re all going up. – Jared Bernstein
• Mortgage Interest Rates Today: Mortgage Rates Spike After U.S. Loses Its Top Credit Rating – Realtor.com
• US housing finance chief tells Powell to lower interest rates – The Hill
• The risk to the housing market if Fannie Mae and Freddie Mac conservatorship ends. On Friday, Treasury Secretary Scott Bessent said privatization of Fannie Mae and Freddie Mac will be on the agenda after trade deals and taxes. – Fast Company

On sales, permits, starts, and supply:    

• NAR: Existing-Home Sales Decreased to 4.00 million SAAR in April; Down 2.0% YoY – Calculated Risk
• Existing Home Sales Fall in April – NAHB
• Lower prices boost new US home sales; outlook downbeat amid higher mortgages – Reuters
• Home Sales in April Fell for the Second Straight Month. The slowest sales pace for any April in 16 years indicates the spring selling season is shaping up as a bust – Wall Street Journal
• Home sales are stuck — and prices are still rising. A tight market is becoming a full-blown affordability crisis as existing home sales stall, prices climb, and mortgage rates top 7% – Quartz
• Final Look at Local Housing Markets in April and a Look Ahead to May Sales – Calculated Risk
• New Home Sales Up in April Despite Stubbornly High Rates – Realtor.com
• Housing Slowing Down – Apollo
• Fewer building restrictions, more housing: Examining builders’ response to demand – Zillow
• Building Material Price Growth Minimal in April – NAHB
• Texas Revs the Growth Machine – Reason
• Homebuilder unsold inventory swells to 2009 levels: Housing markets to watch. There’s greater slack in the new-construction market now than a few years ago, giving buyers some leverage in certain markets to negotiate better deals. – Fast Company

On other developments:    

• Cleveland’s Housing Bargain Bonanza as It Surges Among the Most Affordable Housing Markets – Realtor.com
• Volatile Spring Selling Season Continues – NAHB
• Event: The State of the Nation’s Housing 2025 on June 24 – Joint Center for Housing Studies
• Congress Should Repeal the Low-Income Housing Tax Credit, Not Expand It – Cato Institute
• Housing Market Gets a Shot of Good News – Wall Street Journal 
• U.S.-China Tariff Tension Could Hit These California Housing Markets – Realtor.com
• Affordable Housing Is Almost Pointless – Marginal Revolution
• This State Is Where Young People Prefer To Buy Property the Most – Realtor.com
• Denver Housing Market Is Hit With an Explosion of Listings—How Far Could Home Prices Fall? – Realtor.com

From a paper by Jassim Aladwani:

“Using standard GARCH-type, Markov Switching GARCH-type, and autoregressive distributed lag (ARDL) models, this study employs quarterly dataset from 1995 to 2023 to investigate the volatility shifts of macroeconomic variables, incorporating crude oil prices in Spain. The empirical results of the study clearly confirm that MSGARCH-type models extend beyond the capabilities of standard GARCH-type models, providing enhanced flexibility in modeling the volatility process. The estimated MSGARCH-type models effectively identify breakpoints in all macroeconomic variables volatilities, specifically during significant events such as the global financial crisis (GFC) in 2008, the European debt crisis in 2011, and the Covid-19 pandemic of 2020, Russia-Ukraine War in 2022. In addition, our results indicate that high crude oil price shocks during the global events are important drivers of uncertainty. There is strong evidence that the effects of crude oil price shocks on macroeconomic uncertainty are highly dependent on the prevailing regime. These impacts vary based on investor sentiment and the level of perceived volatility within financial markets. The responses of economic uncertainty to crude oil shocks appear to experience a dramatic change in the major global events, such as the post-global financial crisis (GFC), COVID-19 pandemic, and the Russia-Ukrainian war.”

From a paper by Marko Senekovič, and Jani Bekő:

“There is a lack of research concerning the influence of economic inequality on the size of fiscal multipliers. To address this, we apply a VAR methodological framework to assess the magnitude of fiscal multipliers for 47 economies, using a new quarterly dataset spanning the period from 1995 to 2021. We then gauge the impact of the battery of income and wealth inequality measures on the size of government consumption multipliers. To ensure the robustness of the results, a yearly panel data sample was also tested. The key findings of our empirical exercise can be outlined as follows. First, the estimated government consumption multipliers exhibit a generally positive trajectory throughout the forecast horizon in approximately 66% of the countries analysed, while in 19% of the sample, they remain largely negative, and in the remaining 15% of cases, they display a mixed pattern, being positive only during certain periods. Second, in 53% of the countries examined, the fiscal multiplier exceeds the threshold of one at least once during the forecast period, suggesting a greater output effect of fiscal expansion in these countries. Third, the more pronounced the income and wealth inequality in a country, the higher the value of the fiscal multiplier. This research outcome supports the proposition that higher economic inequality, especially income inequality, will generate greater government spending effects.”

From a paper by Markus Brueckner, Gabriele Ciminelli, and Norman Loayza:

“We examine the relationship between oil revenue shocks and labor market regulation empirically in a sample of 83 economies spanning 1970–2014. We find that oil revenue gains lead to a deregulation of the labor market in autocracies but have no effects in democracies. Oil revenue losses instead cause a sizeable deregulation in democracies but have limited effects in autocracies. We then consider possible transmission channels. Democracies appear to use the rents stemming from a positive oil revenue shock to increase government expenditures. Rent extraction and economic efficiency considerations are instead both plausible deregulation drivers following oil revenue gains in autocracies, as expenditures are not raised, while gross domestic product and employment gradually increase. Finally, the deregulation following oil revenue losses in democracies is consistent with the crisis-induced-reform hypothesis, as such losses deteriorate the current account and budget balances and increase the probability of a systemic banking crisis.”

From a paper by Mischa Stratenwerth:

“This dissertation explores how the political stability of the macroeconomic policy regime underpinning the export-led German growth model has been maintained, despite the model’s uneven distributive outcomes. It combines document analysis and interviews to map the positions of trade unions and business organizations across fiscal, monetary, and eurozone policy debates – covering both relative winners and losers of the growth model. Expanding on emerging Gramsci-inspired conceptualizations of growth model politics, the study focuses on investigating coalitional patterns among producer groups and on the actor-specific mechanisms that secure their support, consent, or compliance. In doing so, it enriches the literature on growth model politics by offering an empirically grounded and conceptually nuanced perspective that complements and challenges broad-brush structuralist, functionalist, and culturalist explanations of the reproduction of growth frameworks. Overall, the in-depth research largely confirms expectations of a dominant growth coalition forming around key business interest groups, but paints a complex picture with regard to the positioning of non-core groups within these dynamic coalitional configurations. Findings indicate that the persistent reproduction of the export-oriented policy framework cannot be fully explained by interest alignment or ideational convergence, but additionally relies on a broader set of cohesion-sustaining mechanisms – ranging from compensation and depoliticalization to coercive enforcement, ignorance, and exclusion – that contribute to obscure distributive conflicts, encourage passive acquiescence, and contain dissent.”