The Unassuming Economist

On prices, rent, and mortgage:    

• U.S. Home Price Growth Cools to Near-Two-Year Low. The S&P CoreLogic Case-Shiller National Home Price Index rose 2.7% in the 12 months to April – Wall Street Journal
• Case-Shiller: National House Price Index Up 2.7% year-over-year in April –Calculated Risk
• Housing market at risk of “sustained downturn” as price growth cools – Axios
• Mapping Home Price Changes – New York Fed
• Housing market map: Zillow just released its updated home price forecast for 400-plus housing markets. Zillow projects that U.S. home prices will fall 0.7% from May 2025 to May 2026. – Fast Company
• These 96 housing markets are seeing falling home prices. Among the 300 largest metro-area housing markets, these 96 markets are seeing falling home prices on a year-over-year basis. – Fast Company
• What Trump’s Bomb Strike on Iran Means for Mortgage Rates in the US – Realtor.com

On sales, permits, starts, and supply:    

• Housing market weakness triggers Lennar to offer biggest incentives since 2009. There is a consensus among major publicly traded homebuilders that the spring 2025 housing market was softer than expected. – Fast Company
• Single-family Construction Loan Volume Grows – NAHB
• Home Prices Stay Steady as Buyers Take Their Time – Realtor.com
• Buyer’s or seller’s housing market? Zillow’s new rating for 250 major markets. Where home sellers—and home buyers—have the most power right now, according to Zillow’s updated analysis released in June. – Fast Company
• Real USA Home Prices Flat for 1 Year & 19% Above 2006 Peak – Real Estate Decoded
• NAR: Existing-Home Sales Increased to 4.03 million SAAR in May; Down 0.7% YoY. Median House Prices Increased 1.3% Year-over-Year – Calculated Risk
• Existing Home Sales Edge Higher in May – NAHB
• New Home Sales Decrease to 623,000 Annual Rate in May. Median New Home Price is Down 7% from the Peak due to Change in Mix – Calculated Risk
• California Home Sales “Sputter” in May; 4th Look at Local Markets. California Active Inventory Highest Reached 67-Month High – Calculated Risk
• Home Sales Stay Sluggish in May as Mortgage Rates and Uncertainty Weigh on Market – Realtor.com
• Home Sales Rose in May, but Housing Market Is Still Sluggish. Existing-home sales edge up 0.8%, ending two-month streak of declines – Wall Street Journal
• U.S. New Home Sales Slump as High Mortgage Rates Persist. Sales of new single-family homes fell 13.7% to 623,000 in May – Wall Street Journal
• How Small Apartments in Big Buildings Became the US Norm. To what extent was the construction boom a product of the sometimes-perverse incentives and disincentives facing developers? – Bloomberg
• Homeownership: Not Enough Supply for Middle-Income Buyers. For teachers, nurses and other skilled workers, few options. – New York Times
• California Democrats wage internal war over Gavin Newsom’s late push to build more housing. Governor is drawing heavy resistance to his housing development proposal. – Politico

On other developments:    

• Interactive Tool Charts Pandemic Homebuying Trends – San Francisco Fed
• The State of the Nation’s Housing 2025 – Harvard Joint Center for Housing Studies
• Unease in the Housing Market Amid a Worsening Affordability Crisis – Harvard Joint Center for Housing Studies
• Zohran Mamdani’s policies will (mostly) not bring abundance to NYC. Progressive ideas still try to defy economic realities. – Noahpinion
• Is U.S. Lumber Self-Reliance Possible? – NAHB
• Institutional Investors Aren’t the Villains of America’s Housing Market – National Review
• More Homeowners Find Themselves Underwater. Some who bought around the market peak in pandemic boomtowns owe more on their mortgages than their homes are worth – Wall Street Journal
• Buyers in the Priciest Housing Markets Need 80% Down To Afford Monthly Costs – Realtor.com
• Thoughts on the Big, Fascinating, Exciting Mamdani Upset! The affordability crisis is real. Mamdani’s offering solutions where others, including the president, not only have nothing, but are making it worse. – Jared Bernstein 
• New York’s Housing Crisis Is So Bad That a Socialist Is Poised to Become Mayor. Zohran Mamdani, a 33-year-old who campaigned on rent freezes, emerged victorious in the city’s Democratic primary – Wall Street Journal
• Will Zohran Mamdani’s Housing Plan Actually Work in New York City? – Realtor.com
• On Housing, All New York Politicians Are Socialists. Allegedly sane, centrist opponents of New York City’s socialist mayoral candidate are all too happy to regulate rental housing into the ground. – Reason
• New Yorkers Vote to Make Their Housing Shortage Worse. Austin, Texas, and other red-state cities have set an example for how to make housing markets work – New York Times
• A New Rail Line May Come to New York. Will a Housing Boom Follow? The Interborough Express, a rail line connecting Brooklyn and Queens, could spur the building of tens of thousands of homes. Obstacles await. – New York Times
• Elevated Rates, Challenging Affordability Conditions Put a Damper on New Home Sales – NAHB
• Housing market at risk of “sustained downturn” as price growth cools – Axios
• Confronting the affordable-housing crisis – McKinsey
• Why Do Republicans Support the Low-Income Housing Tax Credit? Publicly funded homes in some cities are costing taxpayers more than $1 million per unit, but Trump’s “big, beautiful bill” would increase funding for these inefficient projects. – Reason
• San Francisco’s Luxury Housing Market Is Booming Again Thanks to AI Wealth. A new report from Sotheby’s International Realty says the top end of the market has undergone a renaissance. – Bloomberg
• Affordability Crisis Worsens as Home Prices Hit ‘Shocking’ New High—5 Times What the Typical Household Earns – Realtor.com
• Where Are the Least Competitive Housing Markets? – Zillow
• Housing Department to Move Headquarters, Booting National Science Foundation. The plan to depart Washington and take over the science agency building in Virginia raised questions about where N.S.F. employees would go. – New York Times

From a paper by Boyang Lia, Runze Chena, and Yuqin Dua:

“The power generation mix in China heavily relies on fossil energy sources, impeding
the advancement of clean power generation and emission reduction efforts. This paper
presents a macroeconomic model incorporating Emissions Trading Systems (ETS),
clean energy subsidies, and intertemporal learning behavior. It examines how carbon
pricing and clean subsidy policies influence the power generation sector and emission
reduction goals. The findings indicate that (1) pricing strategies based on total
emissions effectively drive emission reductions but may not adequately incentivize
cleaner energy transitions. (2) Increasing clean energy subsidies encourages a shift
towards cleaner technologies, although the impact on emission reductions is moderate.
(3) Combining both policies proves to be more effective than implementing either one
alone. (4) There exists a gap in understanding the clean power generation industry, with
both policies contributing to knowledge accumulation in this sector. The insights from
this study are valuable for countries employing ETS mechanisms.”

From a paper by Christos A. Makridis  and Saurabh Mishra:

“The share of artificial intelligence (AI) jobs in total job postings has increased from 0.20% to nearly 1% between 2010 and 2019, but there is significant heterogeneity across cities in the United States (US). Using new data on AI job postings across 343 US cities, combined with data on subjective well-being and economic activity, we uncover the central role that service-based cities play to translate the benefits of AI job growth to subjective well-being. We find that cities with higher growth in AI job postings witnessed higher economic growth. The relationship between AI job growth and economic growth is driven by cities that had a higher concentration of modern (or professional) services. AI job growth also leads to an increase in the state of well-being. The transmission channel of AI job growth to increased subjective well-being is explained by the positive relationship between AI jobs and economic growth. These results are consistent with models of structural transformation where technological change leads to improvements in well-being through improvements in economic activity. Our results suggest that AI-driven economic growth, while still in the early days, could also raise overall well-being and social welfare, especially when the pre-existing industrial structure had a higher concentration of modern (or professional) services.”

From a paper by Muhammad Ibrahim Shah, Matteo Foglia, Umer Shahzad, and Zeeshan Fareed:

“This paper investigates how oil price, COVID-19, and global energy innovation can affect carbon emissions under time- and frequency-varying perspectives. We contribute to the literature by being the first research to document the relationship between these variables in the short and long run (dynamically) at different frequencies in a multivariate context, thus providing a more detailed picture of the forces driving CO₂ emissions. For this purpose, we use a novel methodology, i.e., the wavelet local multiple correlation (WLMC) recently developed by Polanco-Martínez et al. (2020). The results provide fresh evidence of long-run asymmetric dynamic correlations, highlighting how the oil price plays a key role in the dynamics of CO₂ emissions. Moreover, we find that, during the long period, there is a strong negative co-movement between CO₂ and the global energy innovation index, i.e., more investment in clean energy induces less emission. Supported by our findings, this research suggests crucial policy implications and insights for the governments worldwide in their efforts to revive their economies amidst the pandemic and environmental uncertainties.”

From a paper by Joe Piacentini, Harley Frazis, Peter B. Meyer, Michael Schultz, and Leo Sveikauskas:

“This paper surveys economic literature largely from 2020 and 2021 on how the COVID-19 pandemic and responses to it affect U.S. income inequality. Established trends of growing inequality may continue roughly as before, involving new technologies, international trade, and the growth of “superstar” firms. Employment, earnings, and schooling were affected differently across demographic groups and occupations. The pandemic disrupted lower-paid, service sector employment most, disadvantaging women and lower income groups at least temporarily, and this may have scarring effects. Government policies implemented in response to the pandemic offset much of the effect on income. Higher-paid workers tend to gain more from continuing opportunities to telework. Less-advantaged students suffered greater educational setbacks from school closures. School and day care closures disrupted the work of many parents, particularly mothers. We conclude that the pandemic is likely to widen income inequality over the long run, because the lasting changes in work patterns, consumer demand, and production will benefit higher income groups and erode opportunities for some less advantaged groups. Telework has increased permanently. High-contact jobs and services may continue to face reduced demand and increased automation. School disruptions have been worse for lower-income students and are likely to have lingering negative effects, which may widen future inequality within more recent birth cohorts. The history of the 1918 flu shows that the effect of a pandemic on inequality in income, education, health, and wealth depends on the nature of the pandemic and on behavioral and policy responses.”