Housing: The U.S. Economy’s New Risk Factor

Housing remains a weak spot for the US economy, as suggested in yesterday’snews of a surprisingly large decline in new home sales for June. The report follows last week’s update on new residential construction, which also slumped more than expected last month. On a brighter note, existing home sales, which constitute the lion’s share of transactions for residential […]

U.S. Housing Starts: May 2014 Preview

Housing starts are expected to total 1.029 million in tomorrow’s update for May, based on The Capital Spectator’s median econometric forecast (seasonally adjusted annual rate). The projection represents a modest drop vs. the previously reported 1.072 million for April. The Capital Spectator’s median forecast for May is at the low end of the range of […]

Is the Bull Market in Housing a Bubble?

  The answer depends on your definition of “bubble”… and the market under the microscope. “House prices differ widely across OECD countries, both with respect to recent changes and to valuation levels,” the OECD advises in a report on residential real estate around the world. Measured by the recent price-to-income ratio (a measure of affordability) relative to […]

U.S. Housing Starts Fall as Permits Climb in February

ousing starts fell again in February, inching lower by 0.2% from January. That’s the third monthly decline in a row. The rate of descent is slowing, which constitutes the only good news for this data series these days, but that’s more than offset by the fact that for the first time since 2009 the number of starts […]

U.S. Housing Starts: Jan 2014 Preview

Housing starts are expected to total 997,000 in tomorrow’s update for January, based on The Capital Spectator’s median econometric forecast (seasonally adjusted annual rate). The projection represents a slight decline vs. the previously reported 999,000 for December. Meanwhile, the Capital Spectator’s median estimate for January is moderately higher vs. a trio of consensus estimates based […]

Back to Housing Bubbles

It is widely agreed that a series of collapsing housing-market bubbles triggered the global financial crisis of 2008-2009, along with the severe recession that followed. While the United States is the best-known case, a combination of lax regulation and supervision of banks and low policy interest rates fueled similar bubbles in the United Kingdom, Spain, […]

Why Was the Housing-Price Collapse So Painful? (And Why Is It Still?)

Foresight about the disaster to come was not the primary reason this year’s Nobel Prize in economics went to Robert Shiller (jointly with Eugene Fama and Lars Hansen). But Professor Shiller’s early claim that a housing-price bubble was full on, and his prediction that trouble was a-comin’, is arguably the primary source of his claim to fame […]

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