The Unassuming Economist

From a paper by Harold Glenn A. Valera, Cymon Kayle Lubangco, and Mark J. Holmes:

“We propose a new measure of revisions to consumer inflation expectations using repeated cross-sections rather than requiring panel data. We calculate the value of group average expectations in a prior period as a proxy for what an individual’s expectations might have been using micro data in the Philippines for Q1 2010 to Q2 2024. In contrast to existing mixed evidence, the resulting revisions show sensitivity to price changes in 14 food and energy goods. The equivalence testing finds that the group-based coefficients are valid, as they are: (a) different from an overall sample average-based revision results with Philippine data and (b) similar to rotating panel-based revision results using data from the Michigan Survey of US households. Using Philippine data, we also provide new evidence of significant effects of a firm’s frequency of price changes on expectation revisions.”

From a paper by Borivoje D. Krušković:

“Many central banks adopted inflation targeting under pressure from the IMF. Adoption of inflation targeting happened on pretty favourable macroeconomic terms whose distinctive features were the absence of supply shocks, low budget deficit and foreign currency access. It was a ‘period conducive to price stability’ with inflation on a downward trajectory in many countries, especially developed ones, even before the introduction of inflation targeting. That could have contributed to efficiency of inflation targeting considering other monetary strategies. The most widely used model in designinig monetary policy under inflation targeting is a macroeconomic model of a small open economy from the group New Keynesian model. The results of the econometric analysis in this paper show that inflation targeting is an inefficient monetary strategy in the face of negative supply shocks (financial crises, pandemic, rising energy prices, tariffs), as it leads to rising interest rates, falling GDP, and rising unemployment. The results of the econometric analysis in this paper show that inflation targeting is an inefficient monetary strategy in the face of negative supply shocks (financial crisis, pandemic, rising energy prices, tariffs, etc.), which leads to rising interest rates, falling GDP, rising unemployment, and ultimately to an “inflationary pandemic”.

On cross-country:

• How to Solve the Global Housing Crisis: Liberate Supply Not Subsidise Demand – The Times of Israel

Working papers and conferences:

• What About the Close Calls? In the Mortgage Market, the Behavior of One Group of Loan Applicants Is Particularly Enlightening – Philadelphia Fed
• What Is My Home Worth? – Philadelphia Fed
• Property Tax PassThrough to Renters A Quasi-Experimental Approach – Philadelphia Fed
• Real-time house price model shows U.S. housing market firming – Dallas Fed
• SI 2026 Real Estate – NBER
• Building costs aren’t to blame for high home prices. The link between construction costs and real estate prices has weakened in recent decades, finds research from UChicago Booth – University of Chicago
• Pricing Residential Mortgage Credit Risk in the Post-GFC Era – NBER
• Mapping Crowding, Tenure, Rents and Segregation in the Neighborhoods of Major European Cities around 1900 and Today – International Journal of Urban and Regional Research

On China:

• Real Estate Crash Weighs on China’s Economic Growth. Falling apartment prices have erased the savings of millions of Chinese households, but exports lifted the economy to 5 percent growth last year. – New York Times

On Australia and New Zealand:

• [Australia] Improving productivity growth and housing affordability would support Australia’s high living standards – OECD
• [Australia] OECD calls on Australia to raise GST and increase affordable housing amid budget deficit. Survey by organisation, which is led by former Liberal senator Mathias Cormann, says economy is ‘now normalising’, after post-pandemic struggle – The Guardian

On other countries:  

• [Canada] Canadian Housing Market in Winter Freeze as Prices, Sales Decline – Bloomberg
• [Canada] Out of Reach: Unlocking Canada’s housing affordability crisis. Many Canadian housing markets face a troubling paradox: homes remain unaffordable for buyers even as construction and land costs have receded, leaving many — especially younger Canadians — feeling that homeownership is out of reach. – Senate of Canada
• [Denmark] Denmark should continue to improve public finances, housing affordability and family policies to sustain growth and living standards – OECD
• [Korea]  Seoul Housing Rally Gathers Pace, Deepening BOK’s Policy Dilemma – Bloomberg
• [Nigeria] Lagos Town Demolitions Leave Thousands of Nigerians Homeless – Bloomberg
• [United Kingdom] What’s next for the UK housing market in 2026? – Lloyds Banking Group
• [United Kingdom] UK lenders cut mortgage rates in race for new year buyers. December fall in base rate and relatively benign Budget triggers swath of cheaper deals – FT
• [United Kingdom] House prices jump across Britain as sentiment rebounds after Budget. January increase reverses sharp contractions in previous months – FT
• [United Kingdom] U.K. House Prices See Record January Jump as Post-Budget Uncertainty Fades. The 2.8% gain represents the largest January increase in the 25-year history of Rightmove’s House Price Index – Wall Street Journal
• [United Kingdom] Inner London house prices fall at fastest rate since global financial crisis. Sharp annual decline in most expensive boroughs underscores impact of Budget uncertainty – FT
• [United Kingdom] London House Building Collapses 84% in a Decade as Sales Plunge – Bloomberg
• [United Kingdom] London House Prices End Longest Losing Streak Since 2009 – Bloomberg

On prices, rent, and mortgage:    

• Home price forecast for 2026 across 380 housing markets: Zillow versus Moody’s forecast model. The worst of the pain in the housing market might be now and in the next 6 to 9 months. After that, things will begin to feel a little better—but not good. – Fast Company
• When Housing Policy Becomes Monetary Policy – Cato
• Real-time house price model shows U.S. housing market firming – Dallas Fed
• Michelle Tandler on NYC rent control – Marginal Revolution
• December Mortgage Activity Softens Even as Rates Ease – NAHB
• Worst Case Housing Needs for Renters Ticked Down, But Remain High – Harvard Joint Center for Housing Studies
• Mapped: How Rent Prices Vary Across Major Cities Worldwide – Visual Capitalist
• Around Zero, Noise Looks like Signal. Home prices are rising in some ZIPs and falling in others. This is normal in stagnant markets. – Home Economics  
• House Prices Decline in Local Markets Despite National Growth – NAHB
• Buying More Affordable than Renting in a Majority of Counties, But Home Prices Rising Faster than Rents – ATTOM  

On sales, permits, starts, and supply:    

• America’s new land boom isn’t about housing — or even people. Across the U.S., the AI infrastructure boom is quietly rewiring how land is bought, valued, and governed — often before the public has its say – Quartz
• Commercial Builders Are Losing Their Appetite to Build Anything but Data Centers. Spending on data-center construction is expected to rise by 23% in 2026 – Wall Street Journal
• Stopping Wall Street from competing with main street homebuyers – The White House
• Trump Signs Order Targeting Institutional Housing Investors – Bloomberg
• Trump Outlines Next Steps for Housing Investor Ban. President’s executive order on the issue comes a day before his speech at Davos, where Trump has said he will address housing affordability – Wall Street Journal
• Curbs on Wall Street landlords could stoke house prices, say investors – Reuters
• Trump Is Moving to Bar Wall Street Firms From Buying Single-Family Homes. Here’s What That Would Mean for Affordability – Time
• Trump Says ‘America Will Not Become a Nation of Renters’ as He Touts Restrictions on Investor Homebuyers in Davos Speech – Realtor.com  
• Remodeling Market Sentiment Strengthens in Fourth Quarter of 2025 – NAHB
• Builder Sentiment Loses Ground at Start of 2026 – NAHB
• Building Our Way Out of Our Housing Crisis. Zohran Mamdani should face financial consequences when his ‘warm collectivism’ inevitably results in fewer homes for New Yorkers. – Wall Street Journal
• The Grocery Store at the Center of San Francisco’s Latest Housing Battle. A proposed apartment tower on top of an iconic Safeway highlights tensions between California’s state and local zoning laws. ‘Why does a large parking lot deserve a view of the water?’ – Wall Street Journal
• Lower Rates Combined with Strong Economic Growth Needs Housing Supply Growth to Avoid Higher Home Prices – AEI
• Soft Conditions for Single-Family Built-for-Rent – NAHB
• New Single-Family Home Size Trends: Third Quarter 2025 – NAHB
• 3rd Look at Local Housing Markets in December. Altos: Active single-family inventory was up 1.3% week-over-week – Calculated Risk
• Part 2: Current State of the Housing Market; Overview for mid-January 2026 – Calculated Risk
• Third Quarter 2025 Multifamily Construction Data – NAHB
• D.R. Horton Posts Lower Profit, Expects Elevated Incentives to Drag Down Second-Quarter Margins. CEO Paul Romanowski says that based on December incentive levels, margins would likely decline in the second quarter – Wall Street Journal
• Single-Family Permits Cooled in the Fall – NAHB
• Private Residential Construction Spending Edges Higher in October on Home Improvements – NAHB
• 40 Million Americans Live Alone – Apollo

On other developments:    

• The Suburbs are Back. Suburban homes have appreciated faster than urban ones since the pandemic – Home Economics
• Homeownership Looks Worse When You Measure it Properly. Millennials and Gen Zs lag far behind prior generations – Home Economics
• Real Estate and Housing Market Outlook – Wharton
• Trump Administration Floats 401(k) Withdrawals for Down Payment on a Home – Realtor.com
• Trump housing plan to allow 401(k) money for down payments, adviser says – Reuters
• Making homes affordable again is easier said than done – Axios
• Housing Market: Limited Impact from Policy – Morgan Stanley
• To Make Homes Affordable Again, Someone Has to Lose Out. Young Americans need home prices to fall. Existing owners don’t want to take a hit. – Wall Street Journal
• The long and winding road to housing legislation – Politico
• How to Fix the Housing Market – A Wealth of Common Sense
• Housing Affordability Is Topic A. Just Ask Rival Mortgage Lenders Rocket and UWM. – Barron’s
• Americans Hit the Brakes on Driving—and It Could Shift the Housing Market in Reverse – Reattor.com 
• The housing squeeze: Affordability remains out of reach – Axios

From a paper by John Beirne, and Nuobu Renzhi:

“This paper provides estimates of oil price pass-through (OPPT) to both producer and consumer prices for nine emerging Asian economies using a time-varying parameter SVAR model over the period 1991–2023. We further examine how global factors affect the transmission of oil prices to producer and consumer prices, specifically via shocks in global output, US monetary policy, and global financial market uncertainty. Overall, we find that OPPT is less than proportionate and mostly higher for OPPT to producer than consumer prices, while pass-through estimates also tend to be higher in the long term. In addition, we find that OPPT has been declining for most Asian EMEs in the period after the global financial crisis of 2008. Finally, while the responsiveness of OPPT to global shocks varies depending on the type of shock, contractionary US monetary policy shocks overall most significantly amplify OPPT for both producer and consumer prices.”