Economics and Housing

Paper Summary:

The paper looks at the Wall Street Journal article "Housing Market Shows Further Signs of Cooling" which focuses on the beginning of the decline in the housing market. The paper discusses how the article explains that there has been a change in supply as well as demand, with substantial increases in the inventory of homes available for sale. The analysis in this paper uses economic theories of consumption and supply and demand to explain housing factors described in the news article.

From the Paper:

"The article mentions that there has been a slow growth in personal income. Current income is the most relevant determinant of consumption including home purchases. Inflation reduces the real current income; thus, real consumption. The article states that the housing bubble pushed up housing prices, but new factors have also come into play such as higher oil prices and higher interest rates. Higher oil prices are serving as a tax on consumers, leaving them less money to spend on other goods such as housing."

Sample of Sources Used:

• Arnold, Roger A. (2005)/ Economics, 7th Edition; South-Western Publishing.
• Hagerty, J.R. and Simon, R. (2005, November 15). Housing market shows further signs of cooling. Wall Street Journal. Retrieved from Web site: http://www.realestatejournal.com/buysell/markettrends/20051115-hagerty.html
• Housing demand is elastic. (2006, March, 8) http://www.affordablehousinginstitute.org/blogs/us/2006/03/housing_demand.html

More papers on Economics and Housing:

• Term Paper # 125023 : "Economics and Fiscal Policy"
• Argumentative Essay # 101268 : "Law and Economics and Zoning"
• Analytical Essay # 123531 : "Macro-Economics and Forecasting"

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