Current Housing Market in Todays Economy

Topics: Monetary policy, Supply and demand, Real estate Pages: 4 (1376 words) Published: February 15, 2009
Living today there are many things that affect the economy and vice versa there are many things that the economy affects. The major things that the economy affects are jobs in the airline, automotive, home building, and technological industries. The main reason is because when the economy is doing bad, these fields do not do so good either. They all depend on the economy staying in a good state, in order for them to stay healthy. In this paper I will show how the economy affects the home building industry. I will show the price elasticity of supply and demand, negative and positive externalities, how wage inequality is measured, and the monetary and/or fiscal policies that have affected the home building industry. The housing market is a business where people are buying and selling houses. This used to be done at a high rate. The housing market has since dropped. This is leaving the home builders uneasy. They do not want to build houses because they are not selling at a fast enough rateto keep up with the amount that they are building. It is also causing consumers to slow their buying on other goods. When people move they are also looking to buy new furniture, decorations, appliances, etc; if they aren’t spending all of their money on houses they don’t have to borrow extra money from the bank. This in turn loses money for them. The price elasticity of demand for the housing industry at the present time is elastic. Yes people do need a roof over their head, buy they do not have to buy an expensive house People have sought different avenues like renting a house or an apartment because the rates for rent are lower than a mortgage. There will always be a lot of house on the market, but when the prices are high there will be more. It is a buyers’ market right now, but there are many choices for the buy to choose from. Houses are being foreclosed on at an alarming right. These houses are not always in the best of shape, even if they are brand new, but you normally...

References: Crook, C. (2007, October 20). It’s the Economy, Stupid. National Journal, 03604217, Vol. 39 issue 40. NAHB (2007) Fiscal Policy. Retrieved on the World Wide Web on January 27, 2009 at No author given. (2006, August 26). Gimmie Shelter, Economist, 00130613, Vol. 380, Issue 8492.
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