The Unassuming Economist

IMF’s F&D Magazine on The Economics of Housing:

• Housing’s Unique Role in Lives and Economies Demands Greater Understanding. Affordability and other complex housing issues challenging governments can be better revealed in broader economic analysis – IMF Blog
• Walkways, Not Walls. There are benefits to better connecting macroeconomics with real estate economics – F&D
• The Housing Affordability Crunch. A newly developed dataset shows how the pandemic’s aftermath ushered in the worst housing affordability crisis in more than a decade – F&D
• Housing Markets and Monetary Policy. Comprehensive, country-specific understanding of housing and mortgage markets can help calibrate monetary policy – F&D
• The True Cost of Living. Sharply higher borrowing costs, especially for housing, fueled a disconnect between inflation statistics and consumer sentiment – F&D
• How To Spot Housing Bubbles. Early detection and mitigation can help deflate asset bubbles before they burst – F&D
• China’s Real Estate Challenge. Sliding property prices may presage a painful economic adjustment – F&D
• Are Housing Markets Broken? Many people aspire to own their own home, but it’s becoming increasingly unaffordable – F&D
• Falling Out of Favor. Some countries are turning against foreign buyers as soaring property prices become political – F&D
• São Paulo Reclaims Its Center. Brazil’s megalopolis combines federal and municipal programs to retrofit buildings in the downtown area – F&D
• Housing Africa’s Growing Population. Deeper understanding of informality and better use of technology can build more sustainable housing markets – F&D
• Housing Costs Mount. A look at rising housing cost trend – F&D
• Hidden Fortunes. How dirty money distorts real estate markets – F&D

Working papers and conferences:

• Macroprudential Policy and Capital Flows – CEPR
• Climate change’s impact on real estate prices in Chile – Central Bank of Chile
• From Novelty to Norm: Uncovering the Drivers of Virtual Tour Effectiveness in Real Estate Sales – NBER
• CFP: Real Estate Economics Special Issue on Housing and Housing Policy – The American Real Estate and Urban Economics Association

On the US—developments on house prices, rent, permits and mortgage:    

• Housing Forecast 2025: Mortgage Rates To Stay Above 6% as Home Prices Grow – Realtor.com
• Trump may renew a housing fight that could rattle mortgage rates – CNN
• US Mortgage Rates Decline to 6.69%, Lowest Since Mid-October – Bloomberg
• Freddie Mac House Price Index Increased in October; Up 3.7% Year-over-year. 18 of the 35 cities with largest price declines are in Florida! – Calculated Risk
• US Home Price Insights – December 2024 – CoreLogic
• CoreLogic: Annual Home Price Growth Stalls in October – CoreLogic
• Can rent control have adverse effects on housing affordability? – Econofact
• Giant homebuilders are taking over the housing market—just look at Lennar. Giant homebuilder Lennar recently announced it is acquiring competitor Rausch Coleman Homes, accelerating a housing market trend. – Fast Company
• New York City Rental Report October 2024: What Home Can a Manhattan Renter Afford Across the U.S.? – Realtor.com
• Pro Take: A Trump Deportation Plan Could Have Mixed Impact on Still-Hot Housing Inflation. Construction worker shortages and falling numbers of renters in some areas could both influence housing prices – Wall Street Journal
• Inflation Adjusted House Prices 1.4% Below 2022 Peak. Price-to-rent index is 8.1% below 2022 peak – Calculated Risk
• Private Residential Construction Spending Rises in October – NAHB
• These local housing markets are shifting—just look at inventory. Some housing markets in the Southwest and Southeast are weakening, while others in the Midwest, Northeast, and Southern California remain tight. – Fast Company
• Construction Labor Market Continues to Ease – NAHB
• Where Residential Construction Thrives: Metro Area Hotspots for Jobs and Businesses – NAHB

On the US—other developments:    

• Home builders are cheering Trump’s return to the White House. Companies are eager for lighter regulations. But they also could see their industry strained by tariffs and immigration changes. – Washington Post
• Donald Trump’s Second Term Could Bring ‘Significant Shifts’ to the Housing Market – Realtor.com
• This Old House? Home Buyers’ Best Deals Are on Builders’ Lots. The premium that buyers usually have to pay for a brand-new house is disappearing – Wall Street Journal
• Housing Becoming Unaffordable for First-Time Homebuyers – Apollo Academy
• The Unsung Power Players of Real Estate: How Gen X Carves Up a Significant Slice of the Market – Realtor.com
• Construction Industry Braces for One-Two Punch: Tariffs and Deportations. Trump’s immigration and trade policies put home builders in a vulnerable position – Wall Street Journal
• Housing Cost Burdens Climb to Record Levels (Again) in 2023 – Harvard Joint Center for Housing Studies
• The Mysteries of Cities and Economic Growth – AEI

On Australia and New Zealand:

• [Australia] An Overview Of Australia’s Housing Market And Residential Mortgage-Backed Securities – S&P Global
• [Australia] Tight supply and lower interest rates to lift Australia home prices – Reuters poll – Reuters
• [Australia] How far house prices have soared above fair value – The Sydney Morning Herald
• [Australia] Australian Home Prices Rise at Weakest Pace in Almost Two Years – Bloomberg
• [Australia] Rate cuts won’t stimulate a big upswing in house prices: CoreLogic – Financial Review
• [Australia] Aussie capital cities where house prices are falling and booming: ‘Wealth effect’ – Yahoo Finance
• [Australia] Australia’s housing market loses steam with prices falling in Sydney and Melbourne. More houses for sale in country’s two biggest cities in November than there were at this time of year since 2018 – The Guardian
• [Australia] Why it’s the least worst time to buy a home in three years – The Sydney Morning Herald
• [Australia] How Much Further Will Sydney and Melbourne House Prices Fall? – Bloomberg
• [New Zealand] New Zealand House Prices Fell a Ninth Straight Month in November – Bloomberg
• [New Zealand] New Zealand home prices to rise modestly in coming two years: Reuters poll – Reuters

On other countries:  

• [Canada] Toronto Housing Sales Climb With Buyers Flocking Back to Market. Benchmark price measure increased for a second-straight month. Real estate board president says stage is set for recovery – Bloomberg
• [Canada] Home builders are only part of the solution to the housing crisis – The Globe and Mail
• [Denmark] Why being close to a cycle network can boost house prices – The Conversation
• [France] Paris joins clampdown on holiday apartment rentals, blamed for housing shortage. French capital takes advantage of new law to curb apartment rentals to tourists. Officials say practice limits housing supply for residents – South China Morning Post
• [Hong Kong] Hong Kong’s property slump may be terminal. Demographics and geopolitics will make a recovery harder – The Economist
• [Ireland] Paul McNeive: Has increased housing supply come in time to save the Government? – Irish Independent
• [Ireland] ‘Nothing can be built’: Northern Ireland sewage crisis hits housing construction. Property prices surge as 19,000 homes are left on hold due to lack of wastewater services – FT
• [Norway] Norway Cuts Home Loan Equity Need to Help First-Time Buyers – Bloomberg
• [United Kingdom] House prices and sales across UK expected to rise in early 2025. Buyers seeking to benefit from expiring tax breaks and pent-up demand predicted to drive up costs, according to Zoopla report – The Guardian
• [United Kingdom] UK Home Prices Rise by Most Since March 2022, Lender Says. Average 1.2% price in November far exceeded expectations. Wage gains helping to support buyer interest, Nationwide says – Bloomberg
• [United Kingdom] UK house prices rise at fastest rate in nearly two years. Nationwide reports surprise growth despite near-record prices straining affordability – The Guardian
• [United Kingdom] UK Housebuilding Falls Most in Five Months in Wake of Budget – Bloomberg
• [United Kingdom] Why London’s property market is stagnating. The capital is stuck in a rut; digging itself out is not going to be easy — or cheap – FT

From McKinsey:

“Our newest McKinsey Global Institute (MGI) report, The next big arenas of competition, tells the story of “wizard” industries that grow at fantastic rates, spawn giants, and even shape-shift. We call them “arenas of competition,” and in the past 20 years, they have come to permeate the global economy.

“If I wind back the clock to 2005, the top ten titans of industry were oil companies, retailers, pharmaceuticals…and one software company, Microsoft. The average market cap was $250 billion,” recalls Chris Bradley, a McKinsey senior partner and MGI director. “Today, nine out of the top ten have been replaced by companies that are giant—eight times bigger in value—at 1.9 trillion, and almost all are driven by new technologies and business models. Under our noses, there’s been this radical shift in the industrial landscape, and we wanted to understand why and what it looked like.”

The report identifies 12 thriving arenas that began in 2005 and previews 18 that we think could shape the future. Here, four authors, Chris; Kweilin Ellingrud, a McKinsey senior partner and MGI director; Kevin Russell, an MGI senior fellow; and Suhayl Chettih, an engagement manager, share insights from the research.”

Continue reading here.

From mint:

“There is a strong business case for inclusive leadership. Research carried out by BCG points out that inclusive leaders cut down employee attrition risk by as much as 76 per cent. Reports over the years have also correlated diverse leadership teams to not only a boost in morale, productivity, psychological safety, and belonging which results in talent retention, but also a significant improvement in financial performance.

While year-on-year business growth remains critical, McKinsey’s latest study also highlights how organisations today are keen on driving holistic impact. This values the interests and needs of all stakeholders – employees, customers and investors. Moreover, with GenZ entering the workforce, prioritising ESG goals, and a shift towards sustainable, inclusive growth become part of this changing picture.”

Continue reading here.

Walkways, Not Walls | There are benefits to better connecting macroeconomics with real estate economics | Prakash Loungani 

The Housing Affordability Crunch | A newly developed dataset shows how the pandemic’s aftermath ushered in the worst housing affordability crisis in more than a decade | Deniz Igan 

The True Cost of Living | Sharply higher borrowing costs, especially for housing, fueled a disconnect between inflation statistics and consumer sentiment | Lawrence Summers, Marijn Bolhuis, and Judd Cramer 

China’s Real Estate Challenge | Sliding property prices may presage a painful economic adjustment | Kenneth Rogoff and Yuanchen Yang 

São Paulo Reclaims Its Center | Brazil’s megalopolis combines federal and municipal programs to retrofit buildings in the downtown area | Elizabeth Johnson 

Housing Africa’s Growing Population | Deeper understanding of informality and better use of technology can build more sustainable housing markets | Kecia Rust 

How To Spot Housing Bubbles | Early detection and mitigation can help deflate asset bubbles before they burst | Enrique Martínez García 

Housing Markets and Monetary Policy | Comprehensive, country-specific understanding of housing and mortgage markets can help calibrate monetary policy | Mehdi Benatiya Andaloussi, Nina Biljanovska, and Alessia De Stefani 

Falling Out of Favor | Some countries are turning against foreign buyers as soaring property prices become political | Maria Petrakis 

Hidden Fortunes | How dirty money distorts real estate markets | Chady El Khoury 

Back to Basics | Are housing markets broken? | Hites Ahir  

Picture This | A look at rising housing cost trend | Marta Doroszczyk

From a paper by Iyanuoluwa Fatoba and Adewumi Otonne:

“This study aims to investigate fiscal policy shocks’ impact on Nigeria’s Income Inequality and
Household Poverty. Using the impulse response function and variance decomposition technique
within the Bayesian Vector Autoregressive framework (BVAR), findings from the study show that
from year 2 to 15, a 1% shock to tax revenue (i.e., when taxes are suddenly changed) generates a
reduced average impact of 0.036% on household poverty. In contrast, household poverty increases
with shocks to government expenditure (i.e., when government expenditures are suddenly altered) in
the short run, with an average impact of 0.022%. In other words, household poverty increases in the
short run (years 2 to 4) and decreases in the medium to long run (years 5 to 15) with shocks to
government expenditure. Similarly, the results show that shocks to tax revenue reduce income
inequality (years 2 to11), and it increases the gap between the rich and the poor in the long run (years
12 to 15). Meanwhile, shocks to government expenditure increase the gap between the rich and the
poor in the short to medium run (year 2 to 6) while decreasing the gap in the medium to long run
(year 7 to15). The implication of these findings suggests that shocks to tax revenue directly benefit
low-income families and individuals in Nigeria. Moreover, as unanticipated alteration of government
expenditure increases household poverty and income inequality in the short run to medium run, any
shock to government expenditure (internal or external) should be combated with pro-poor policy
action.”