The Unassuming Economist

From a paper by Danijela Lazović Vuković, and Jože P. Damijan:

“This paper studies the drivers of rising income inequality in OECD countries between 1980 and 2018. By testing Milanovic’s TOP hypothesis in our sample, we measure the extent to which these distributional outcomes have been driven by either technological progress or globalization and the extent to which they have been influenced or mitigated by policy choices. The results of our empirical analysis provide the basis for confirming the TOP hypothesis. We find evidence that a 10 percent increase in trade openness, financial globalization, and technological progress is on average associated with a 0.4 percent, 0.3 percent, and 0.9 percent change in market inequality, respectively. At the same time, policies such as public expenditure on education, employment protection legislation and direct income taxes promote a more equal distribution. Our most notable finding, however, is that policies not only have a direct equalizing effect, but also mitigate the effects of globalization and technological progress on income inequality. The results of our study suggest that there are reasonable alternatives to anti-globalization strategies and that redistributive and labor market policies can be tailored to control inequality in the era of globalization and technology.”

On cross-country:

• Why holiday rentals are winning the war for Europe’s city centres. Residents of tourist hotspots have long demanded that Airbnb-style letting platforms be banned. But booking numbers in Europe — and housing costs — are still rising – FT
• Recent surges in house prices have affected many — but not all — countries in the European Union – Our World in Data

Working papers and conferences:

• Macroprudential and monetary policy tightening: more than a double whammy? – BIS
• Selected Macroeconomic and Social Aspects of Housing Affordability – Intereconomics
• Housing Supply and Housing Affordability – NBER
• Does Homeownership Matter? The Long-Term Consequences of Losing a House during the Great Recession – NBER
• Reexamining Lackluster Productivity Growth in Construction – Regional Science and Urban Economics
• Credit supply, housing demand, and rising home prices. A change in veteran home loans can help explain home price dynamics – Minneapolis Fed
• Industrical Organization of Housing Markets, Fall 2025 – NBER

On Australia and New Zealand:

• [Australia] Could Trump’s tariffs lead to another house price boom in Australia? Sharemarket volatility and fear of recession can scare property investors, but lower borrowing rates may push up home values – The Guardian
• [Australia] Australia’s looming election brings housing crisis into focus – BBC
• [Australia] Election cons will fuel higher house prices and debt – Financial Review
• [Australia] The housing policies of both major parties are bad for Australia’s aspiring homebuyers. The plans would exacerbate the problem they say they are trying to solve – rising property prices – The Guardian
• [Australia] Leaders brush off warnings from economists that duelling housing policies will drive up prices in Australia. Neither Anthony Albanese nor Peter Dutton say they want house prices to fall, as experts warn new promises could worsen affordability crisis – The Guardian
• [Australia] Home ownership is slipping out of reach for many Australians. Will the major parties’ promises make a difference? Neither Labor nor the Coalition’s policies will solve the housing crisis. At least they are competing over who can get the most homes built – The Guardian
• [Australia] Australia does not have enough tradies to fulfill Labor’s housing promise, experts say. Construction industry already faces shortfall of 80,000 workers as government vows to build 250,000 homes a year for four years – The Guardian
• [Australia] Why is it so hard for everyone to have a house in Australia? – The Conversation
• [Australia] Liberals want house prices to grow slower than wages – Financial Review
• [Australia] Not enough houses are being built in Australia, and Labor has promised 1.2m more. Here’s what needs to happen. ABS data shows current rates of construction unlikely to meet government’s five-year Housing Accord target – or estimates of demand – The Guardian
• [Australia] Why working hard no longer buys you a home in Australia. We need to end the federalism disconnect and enable states to strip away their own government-imposed costs on new housing. – Financial Review
• [Australia] Australia’s housing policy looks to fix symptom, not cause – Oxford Economics  
• [Australia] Excuse my cynicism, but after 25 years of the same housing policies, could Australian leaders try something else? First homeowners’ grants have long been the go-to policy by state and federal governments. And yet here we are in 2025 with a worsening housing affordability crisis – The Guardian
• [Australia] How Australia’s Housing Market Became So Out of Reach. Ballooning property prices and rents are causing serious housing affordability problems in Australia. So how bad is it? And how did it get to this point? – Bloomberg
• [Australia] Adelaide becomes fifth Australian capital where median house value exceeds $1m. Across Australia, home prices grew at slowest rate in two years and unit prices fell in March, Domain says – The Guardian
• [Australia] Half of Australian landlords sell their investments after 2 years, adding to renters’ insecurity – The Conversation
• [New Zealand] House prices down, listings up: Why Real Estate Institute is feeling positive – RNZ

On other countries:  

• [Canada] Canadians Are Cashing Out Their American Vacation Homes. Political uncertainty, coupled with a weak Canadian dollar, is driving owners to sell properties they’ve had for decades – Wall Street Journal
• [Canada] Stressed and Sidelined Homebuyers Start to Strain Canada Economy – Bloomberg
• [Canada] Housing starts for March 2025 – CMHC
• [Canada] Canada: Housing prices continue to fall in March – National Bank of Canada
• [India] Q1 home sales dip 19%, less than 1 lakh residential units sold in Jan-March. Against the backdrop of worsening geopolitical concerns that can deeply impact the domestic job market, sales fell in all key residential markets except Bengaluru and Chennai – Business Standard
• [Ireland] House prices now nearly 20% higher than at peak of pre-crash property bubble in 2007. Some 3,245 dwellings were purchased in February, down 14 per cent from January, CSO says – The Irish Times
• [Singapore] Singapore Home Sales Cool as Tariffs Threaten Market Rally – Bloomberg
• [United Kingdom] Barclays joins other lenders to cut mortgage rate below 4%. Brokers warn some lenders might be slow to pass on lower prices due to uncertainty around trade policy – FT
• [United Kingdom] Tariff turbulence: Our first thoughts on what this means for the UK housing market – Savills
• [United Kingdom] The UK’s Housing Affordability Crisis is Easing. It may not feel like it, but houses in the UK are steadily becoming more affordable. – Bloomberg
• [United Kingdom] UK property asking prices up 1.3% on year, Rightmove says – Reuters
• [United Kingdom] London Property Faces Hit From Trade War, Rightmove Says – Bloomberg
• [United Kingdom] UK house prices rose by most in over two years in February, official data shows – Reuters

On prices, rent, and mortgage:    

• Revealed: The ZIP Codes Where Home Prices Have Increased the Most Since 2024 – Realtor.com
• Stubbornly High Mortgage Rates Thwart the Crucial Home-Selling Season. Mortgage rates stayed flat while stock-market volatility and recession fears threaten the housing market – Wall Street Journal
• Mortgage Rates Remain Steady—but Home Shoppers Will Have To Navigate a Lot of Volatility – Realtor.com
• How Market Volatility Can Affect Homeowners and House Hunters – Wall Street Journal
• Homeowners Have Been Waiting Years To Sell—but Feel ‘Locked In’ by Mortgage Rates – Realtor.com
• Home prices are dropping in some cities. See what it’s like in your neighborhood. – Washington Post
• The 10 ZIP Codes Where Home Prices Have Fallen the Most Since 2024—Including a Pricey Florida Hot Spot – Realtor.com
• Survey: 81% of Potential Sellers Think They Will Get Their Asking Price or More This Year – Realtor.com
• The Florida housing market is so weak that this giant builder is cutting prices. KB Home CEO Jeffrey Mezger says the start of the housing market’s 2025 spring selling season is ‘more muted’ than usual. – Fast Company
• Home Price Expectations Survey (HPES) – Fannie Mae
• The Coachella Effect! Home Prices in Festival Hot Spot Cities Have Nearly Doubled in Under 10 Years – Realtor.com
• Washington lawmakers clash over rent cap proposal – Axios

On sales, permits, starts, and supply:    

• Why America Should Sprawl. The word has become an epithet for garish, reckless growth — but to fix the housing crisis, the country needs more of it. – New York Times
• Part 2: Current State of the Housing Market; Overview for mid-April 2025 – Calculated Risk
• 2nd Look at Local Housing Markets in March – Calculated Risk
• 3rd Look at Local Housing Markets in March – Calculated Risk
• Building Material Prices Continue to Grow at Slower Pace – NAHB
• Housing market inventory is rising just about everywhere—just look at this map. National active housing inventory for sale is up 28.5% year-over-year. It’s even starting to rise in the Midwest and Northeast. – Fast Company
• Where Do Builders and Remodelers Buy Building Products? – NAHB
• Permits Pullback in February 2025 – NAHB
• Watch Inventory and Why Measures of Existing Home Inventory appear Different – Calculated Risk
• Despite Exemptions and Delays, Tariffs are Already Affecting Builders – NAHB
• Build Homes on Federal Land – New York Times
• Understanding the housing supply gap: What every real estate agent needs to know – Realtor.com
• Zillow’s bold move to confront off-market housing inventory. Zillow just banned home listings from appearing on its site if they’re first listed for sale in private networks more than 24 hours before appearing on the MLS. – Fast Company
• Housing Supply Frameworks Act Would Break Down Barriers to Housing Development – National Association of Realtors
• Builder Confidence Levels Indicate Slow Start for Spring Housing Season – NAHB
• Housing Starts Decreased to 1.324 million Annual Rate in March – Calculated Risk
• Housing Starts Decline Amid Economic Uncertainty – NAHB
• America’s housing shortage by the numbers – The Hill

On impact of tariffs on housing:

• From tariffs to tightness: What’s happening in the US housing market? – JP Morgan
• The Surprising Impact That Trump’s Tariffs Will Have on Luxury Real Estate – Realtor.com
• Trump’s Tariffs on China Now Total 145%—and Beijing’s Retaliation Could Hit U.S. Homebuyers – Realtor.com
• How to Tell What Your Home Will Be Worth in a Trade War. These four metrics can provide clues about how the housing market is reacting to higher tariffs – Wall Street Journal
• Wealthy Buyers Are Backing Out of Multimillion-Dollar Home Deals. President Trump’s trade war and stock market chaos have put the once unshakable high-end home market on ice – Wall Street Journal
• Apartment Developers Who Overbuilt Luck Out With Tariffs. The multifamily industry now can pause most construction ahead of potential tariffs on building materials – Wall Street Journal
• This Surprising State Is Most Reliant on Imports—What Tariffs Could Mean for Its Housing Market – Realtor.com

On other developments:    

• Uncertainty looms after a more stable D.C.-area housing market in 2024. “Last year was a whole different universe.” – Washington Post
• Housing market affordability is so stretched that home turnover hits a 40-year low  . When adjusting for U.S. population size, U.S. existing home sales are hovering around four decade lows. – Fast Company
• A Growing Share of New Yorkers Are Set to Receive — Not Buy — Their Homes. About a quarter of all Manhattan home sales in 2024 involved a trust, a preferred tool for passing on wealth. – Bloomberg
• Just One-Third of 30-Year-Olds Own a Home Today—as Adults Delay Major Life Milestones – Realtor.com
• Housing affordability issues show few signs of easing – The Hill
• Who’s to Blame for America’s Housing Crisis? Readers respond to our March 2025 cover story and more. – The Atlantic
• Immigrants, Housing Wealth, and Local Government Finances. In addition to the $1.7 trillion in directly paid property taxes as property owners, immigrants also generated $513 billion in taxes as renters and another $1.1 trillion through their positive effects on property values in their roles as consumers. – Cato Institute 
• Another reason housing in Texas is cheap
• What we’ve been reading: urbanism, science, tech, aesthetics and more … – The Works in Progress Newsletter
• Average Property Tax Amount on Single-Family Homes Up 2.7 Percent Across U.S. in 2024 – ATTOM
• Democrats alarmed over upheaval at housing regulator, fearing instability. Supporters say Fannie and Freddie provide an anchor for a market suffering under elevated interest rates and a shortage of affordable residences. – Politico

From a paper by Du Zhang and Rundong Chen:

“This article analyzes the impact of global economic uncertainty (GEU) and country-specific economic uncertainty (CSEU) on cross-border capital flows using quarterly data from 31 countries between 1997 and 2022, employing a DFM-SV model. The findings reveal that rising GEU leads to capital inflows, while increasing CSEU results in capital outflows. Macroeconomic variables such as CPI and interest rate spread can moderate the effects of GEU and CSEU on capital flows. Additionally, the equity index mitigates capital outflows driven by higher CSEU. In emerging markets, capital flows are particularly sensitive to macroeconomic factors. The influence of GEU on capital flows is moderated by government spending, stock indices, and the real effective exchange rate (REER). Government spending, import volumes, and stock market volatility exacerbate CSEU-induced capital outflows, while the REER dampens them. These insights deepen our understanding of economic uncertainty’s role in cross-border capital movements, offering valuable implications for market regulators, firms, and investors.”

From a paper by Luis I. Jácome, Nicolás E. Magud, Samuel Pienknagura, and Martin Uribe:

“As inflation targeting (IT) turns 35, it has become a key institutional monetary framework by central banks. Yet, this paper shows that stark differences exist among inflation targeting countries in the conduct of monetary policy. Behind such heterogeneity, the legacy of a high inflation history appears as a preponderant factor. We propose a model that diverges from existing IT workhorse models by adding path-dependence (to a forward-looking model) and potentially imperfect central bank credibility. We show that achieving low inflation (hitting the target) requires more aggressive monetary policy, and is costlier from an output point of view, when individuals’ past inflationary experiences shape their inflation expectation formation. In turn, we provide empirical evidence of the need for these two theoretical additions. Countries that experienced a high level of inflation before adopting the IT regime tend to respond more aggressively to deviations of inflation expectations from the central bank’s target. We also point to the existence of a credibility puzzle, whereby the strength of a central bank’s monetary policy response to deviations from the inflation target remains broadly unchanged even as central banks gain credibility over time. Put differently, a country’s inflationary past casts a long and persistent shadow on central banks.”