The Unassuming Economist

From a paper by Simona E. Cociuba and James C. MacGee:

“Demographic projections show the majority of OECD economies will see declines in their working-age populations in the coming decades. This is potentially problematic, since young workers account for a large share of net labor reallocation between growing and shrinking industries. To examine if sectoral reallocation costs are exacerbated by an aging population, we develop a three-sector perpetual youth search model with sector-specific human capital. Our model features two interconnected frictions: sectoral preference, which implies that only some workers are mobile across sectors, and a wage bargaining distortion, whereby mobile workers’ outside option of searching in the growing sector dampens the fall in shrinking sector wages, leading to rest unemployment. In our parametrized model, as population growth declines from 3 to  percent, output losses from a one-time reallocation shock of 3 percentage points increase seven-fold to nearly 10 percent of annual GDP, and there are extended periods of high unemployment and low vacancies.”

From a paper by Michał Brzozowski and Joanna Siwińska-Gorzelak:

“This article examines the impact of robotization on the short-term correlation between employment and output. We estimate the Okun’s Law relationship utilizing panel data from 35 OECD countries for the period from 1996 to 2020. Our empirical evidence, backed up by a battery of robustness tests, consistently shows that automation contributes to job-preserving recessions by mitigating increases in unemployment during economic contractions. This challenges common assumptions regarding the detrimental impact of automation on employment. Additionally, we do not find support for the notion that automation causes jobless recoveries.”

On cross-country:

• What is driving European cities’ housing affordability challenge? Housing affordability has emerged as a central challenge across Europe, particularly in major cities and tourist hotspots. – Oxford Economics
• Has Airbnb reached its peak? Brian Chesky, its boss, wants to offer more than just a bed to sleep on – The Economist
• Tourism, Short-Term Rentals and Housing Affordability – European Parliament
• Housing Challenges for Young Europeans – European Parliament
• La especulación inmobiliaria sacude Europa. Las dificultades para los ciudadanos se han agravado a medida que han retrocedido las políticas sociales – El Pais

Working papers and conferences:

• Monetary Policy and Housing Overvaluation – NBER
• Planes Overhead: How Airplane Noise Impacts Home Values – NBER
• Building Segregation: The Long-Run Neighborhood Effects of American Public Housing – UC Davis
• Global Tides on Local Shores: how do international capital flows affect house prices? – University of Zurich
• Aging and Housing Returns – Philadelphia Fed
• The Role of Single-Family Rentals in the U.S. Housing Market – St. Louis Fed
• Multifamily housing operators describe a “precarious position”. Apartment owners and managers report more financial stability now than last year, but say there’s lots more uncertainty ahead – Minneapolis Fed

On Australia and New Zealand:

• [Australia] There’s a catch in the plan to build more affordable housing in Sydney – and tenants are feeling the brunt. As the NSW developer bonus leads to older buildings being knocked down to make way for new, low-cost renters fear being priced out of their neighbourhood – The Guardian
• [Australia] Australia’s home prices surge by most in over two years in October – Reuters
• [Australia] RBA holds official interest rate at 3.6% while warning of rising house prices and rents. Reserve Bank’s decision to leave cash rate on hold was widely expected and major banks predict no interest rates cut until 2026 – The Guardian
• [Australia] More homes, better cities: Letting more people live where they want – Grattan Institute

On other countries:  

• [Canada] Canadian Snowbirds Are Ducking Out of the U.S. Housing Market Over Trump Tariffs—but These Sun-Soaked Spots Still Shine – Realtor.com
• [Canada] Toronto Home Sales Dip as Tariff Fears Keep Buyers Sidelined – Bloomberg
• [Korea] South Korea’s Housing Market Is a ‘Ticking Bomb,’ President Says – Bloomberg
• [Netherlands] As the Dutch Vote, One Issue Carries the Day: Affordable Housing. The small European nation of 18 million people is in the middle of its worst housing crunch in decades. But there is no quick political solution. – New York Times
• [United Kingdom] How new renters’ rights could drive landlords out of the market – The Conversation
• [United Kingdom] Britain’s housing chief is channeling Trump. Labour MPs are getting queasy. Steve Reed’s donning the red hat and bringing the energy — but is he risking Labour seats? – Politico
• [United Kingdom] What will Labour sacrifice for its housing targets? A standoff in south London is putting it to the test – The Guardian
• [United Kingdom] New homes: even if you build them, there’s no one to buy them. We’re often told housing demand exceeds supply — so why are new homes struggling to be built and bought? – FT
• [United Kingdom] UK net mortgage approvals hit 9-month high despite Budget tax fears. BoE figures show activity in housing market remains resilient – FT
• [United Kingdom] UK House Prices Increase Again in October, Nationwide Says – Bloomberg
• [United Kingdom] UK house prices rise in October, defying pre-budget nerves – Reuters
• [United Kingdom] Rachel Reeves plans Budget tax raid on expensive homes. UK chancellor predicted to plump for ‘least worst option’ of creating higher council tax bands in England – FT
• [United Kingdom] UK house price growth slows as buyers ‘sit on sidelines’ before budget. Amid talk of property taxes, average price of home rose by 0.3% in October to £272,226, Nationwide says – The Guardian
• [United Kingdom] ‘Out of reach’: stalled newbuilds leave Labour’s social housing targets in tatters. As some families face a 200-year wait for an affordable home, what exactly has gone wrong? – The Guardian
• [United Kingdom] Average house prices to increase by 22.2% over the next five years – Savills

On prices, rent, and mortgage:    

• House Prices to Income. New Data for 2024 Wages Released In October – Calculated Risk
• Easing Rates, Limited Relief: U.S. Housing’s Gradual Recovery – TD
• Freddie Mac House Price Index Up 1.0% Year-over-Year in September. Punta Gorda House Prices Down Over 20% from Recent Peak – Calculated Risk
• Lowest Mortgage Rates in Over a Year in October – NAHB
• Falling Mortgage Rates Boost Housing Market for Now—as Government Shutdown Enters Second Month, Clouding Outlook – Realtor.com
• Risky Loan From Housing-Bust Era Is Making a Comeback. Buyers embrace adjustable-rate mortgages, chancing higher payments later for lower ones now – Wall Street Journal
• Bessent says high US interest rates may have caused housing recession – Reuters
• Asking Rents Mostly Unchanged Year-over-year – Calculated Risk
• The 5 best cities in America for renters — and 5 where you should buy instead. Some U.S. cities reward renting, others make buying the smarter bet. Here’s where the numbers favor each move, according to new 2025 data – Quartz
• Lawler: Single-Family Rent Trends at INVH and AMH – Calculated Risk
• Q3 NY Fed Report: Mortgage Originations by Credit Score, Foreclosures Increase Slightly – Calculated Risk
• Home Price Growth in Opportunity Zones Slightly Behind Rest of Nation in Second Quarter – ATTOM

On sales, permits, starts, and supply:    

• More Home Purchases Are Falling Through in an Uncertain Economy. Buyers worried about job prospects are getting cold feet, or realizing that costs will be higher than expected – Wall Street Journal
• October 2025 Monthly Housing Market Trends Report – Realtor.com
• Bedrooms in New Single-Family Homes in 2024 – NAHB
• Builders Are Offering Mortgage Rate Discounts. Home Buyers Aren’t Biting. New homes are sitting unsold, despite the discounted mortgages that builders are offering – Wall Street Journal
• Multifamily Developer Confidence Increases in Third Quarter, But Still in Negative Territory – NAHB
• 1st Look at Local Housing Markets in October – Calculated Risk

On other developments:    

• What Will It Take to Solve America’s Housing Crisis? New research from Wharton’s Joseph Gyourko looks back 50 years to explain why home prices are so high now. – Wharton
• Housing Inequality Will Get Worse Before It Gets Better – Bloomberg
• Government Shutdown Forces Homebuyers Back Onto Sidelines in Hardest Hit Markets – Realtor.com
• Stabilization and Speculation. Struggles over New York City’s housing policy – Phenomenal World
• Why American Housing Markets Have Stalled – Forbes
• Mamdani Has a Point About Rent Control. In an interview, the candidate argued that the policy is essential to get voters on board with pro-housing reforms. – The Atlantic
• New York Real Estate Expert Warns Mayoral Election Will ‘Change Everything’ for Housing—but Insists Residents Shouldn’t ‘Panic’ – Realtor.com
• Rising Unemployment Could Worsen Young Adults’ Housing Challenges – Harvard Joint Center for Housing Studies
• Prospects for Improving Housing Affordability – Econofact
• Zohran Mamdani Wins New York City Mayoral Election—After Promising Sweeping Tax and Housing Changes – Realtor.com
• Homeownership costs, dropping home values hit Black households hardest. Minority households are more likely to be cost-burdened, spending more than 30% of their income on mortgage, property taxes and insurance – Zillow
• What Do Home Mortgage Disclosure Act Data Tell Us about the Southeast? – Atlanta Fed
• The Folly of ‘Affordability’ Politics. Americans are understandably frustrated by higher prices. But politicians like Zohran Mamdani, who promise to lower costs instantly, are selling economic fantasies. – The Free Press
• Sell or Stay? The High-Stakes Decision Facing Real Estate Investors – Realtor.com
• New Yorkers Pass Ballot Measures Tackling City’s Housing Crunch. The proposals aim to accelerate development and boost affordable housing. – Bloomberg
• Housing in Recession: Interest Rates or Policy Uncertainty – Econbrowser

From a paper by Karen Dynan and Douglas Elmendorf:

“This paper simulates economic developments as if the discretionary fiscal stimulus enacted in the
past two recessions had not occurred and additional automatic fiscal stabilizers had been deployed
instead. For the calibration of key economic relationships most consistent with the empirical
literature, we find that more sustained fiscal stimulus would have pushed unemployment down
more rapidly following the Great Recession and that more limited stimulus would have caused
inflation to increase much less following the COVID recession. We caution, though, that our
estimates are uncertain given the large number of assumptions embedded in the calculations. Under
different assumptions about the supply side of the economy when resource utilization is high, the
stimulus enacted in early 2021 was not a significant cause of the observed runup in inflation that
followed, and substituting an automatic stabilizer would have made little difference to inflation.”