The Housing Industry: Implications of the Economic Downturn Analytical Essay by Nicky

An overview of the housing construction industry and a discussion of the industry's dependence on shifts in economic supply and demand.
# 146476 | 1,844 words | 5 sources | APA | 2010 | US
Published on Dec 29, 2010 in Economics (General)

$19.95 Buy and instantly download this paper now


The paper discusses the housing construction industry and focuses on how highly dependent the housing construction industry is on shifts in supply and demand. The paper describes that when consumer demand is rising, industry is expanding, and the desire to purchase new houses is rising, the industry begins to boom. When demand contracts, one of the first things businesses cut back upon is building new facilities, including rental properties. Consumers, insecure in their jobs, cannot afford new homes. The paper concludes that this is why housing demand is considered a bellwether of general economic expansions and contractions, and during the recent economic expansion, a reduction in demand for new housing was seen as one of the first indications the economy was in recession.

Table of Contents:
Shifts and Price Elasticity of Supply and Demand
Positive and Negative Externalities
Wage Inequality
Monetary and Fiscal Policies

From the Paper:

"Prices in the industry are quite elastic in the sense that no one 'needs' to build many buildings in the United States. Inelasticity is inherent in the price of certain materials--expensive items like concrete, unionized labor, and other input costs ensure that building homes will never become 'too cheap,' and it is unlikely that a private housing company will build a new structure during a recession, given the major commitment made by constructing a building. Commercially, property owners are hesitant to create new condominiums and developments, fearing that economic circumstances contract still further. That is one reason why it has often been the government who has assumed the burden of building infrastructure projects to stimulate jobs in the construction industry, including public housing, when the housing sector no longer seems likely to recover without government stimulation."

Sample of Sources Used:

  • The Federal Reserve, monetary policy, and the economy. (2009). Dallas Federal Reserve. Retrieved January 22, 2009 at
  • Construction. (2007, December 18). Bureau of Labor Statistics. Retrieved January 22, 2009 at
  • Nutting, Rex. (2009, January 21). Builder's confidence reaches record low. Retrieved January 22, 2009 at MarketWatch.{9FB49E5D-1085-4592-8159-421B05D51CA2}&
  • Smith, Hubble. (2009, January 20). Economists say housing market to remain unstable. Las Vegas Review Journal. Retrieved January 22, 2009 at
  • Orr, Deborah. (2009, January 18). America's weakest housing markets. Retrieved January 22, 2009 at

Cite this Analytical Essay:

APA Format

The Housing Industry: Implications of the Economic Downturn (2010, December 29) Retrieved January 28, 2022, from

MLA Format

"The Housing Industry: Implications of the Economic Downturn" 29 December 2010. Web. 28 January. 2022. <>