James Hamilton on the Housing Market

Prof. Hamilton has an excellent post on the housing market. The short version is that the slight decline in the 30 year mortgage rate should help with the decline in the housing market. However, the large supply of existing of unsold homes will be a source of hardship for homebuilders. This hardship will translate into reduced levels of employment in that sector and reduced spending which will be drag for both local and the national economy. The next big thing to watch are sub-prime loans and foreclosures on such properties and fears of price depreciation producing some unfavorable dynamics for the market, and possibly the economy as a whole. In short, moderately good news, but with reason to still be concerned.

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Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.