Episode Description: The Resilience of the US Housing Market

In this episode, we delve into the current state of the US housing market and explore the reasons behind its surprising resilience despite rising interest rates. Typically, higher interest rates would lead to a decrease in house prices, but this hasn't been the case. We examine the factors contributing to this phenomenon and its implications for the economy.

One striking observation is that the average monthly mortgage payment has doubled in the past three years, yet housing prices have not come down. We discuss the possible reasons behind this trend and the impact it has on potential homebuyers.

Furthermore, we explore the freeze in the housing market, characterized by fewer sales of existing homes and a lower inventory of available housing. However, we also uncover how this decrease in housing transactions has been offset by increased spending on remodeling and a stronger new home market. We analyze the strategies employed by home builders, such as offering incentives like lower mortgage rates, to attract buyers in this challenging environment.

Moreover, we examine the positive macroeconomic consequences of the housing market's resilience. Increased spending on remodeling and a rebound in housing construction have had a significant impact on the overall economy. We discuss the implications of these trends and their potential long-term effects.

Finally, we address the concerns of the Federal Reserve regarding the interaction between the property market and inflation. Rising house prices could lead to increased rents and inflation, which raises important questions about the future stability of the housing market and its impact on the broader economy.

Tune in to this episode as we explore the fascinating dynamics of the US housing market and shed light on the factors driving its unexpected resilience in the face of rising interest rates.

The highest interest rates in years should lead to a fall in house prices. But peculiarities of America’s mortgage market are driving them up. Egg-freezing was supposed to give women more control over childbearing; we look at scant data showing how successful it really is (10:57). And remembering Isabel Crook, an anthropologist who embraced China’s communist transformation, warts and all (15:44).  

Join our team of audience-research participants and make a bit of cash here.

Hosted on Acast. See acast.com/privacy for more information.