Why the Housing Market Is Still Stalling the Economy

[88m3]

Why the Housing Market Is Still Stalling the Economy
APRIL 24, 2014
By Neil Irwin
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Peter Fields, the president of Fields Construction, touring a nearly completed home at the North Oaks subdivision in Salem, Va., near Roanoke. He and his partners face a housing market that has not rebounded with the economy.

Sam Dean for The New York Times


Neil Irwin

@Neil_Irwin

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• 6.7 percent. That activity would close nearly 40 percent of the gap between America’s current weak economic state and full economic health.
  
  Continue reading the main story
  Residential Investment as a Share of the Economy
  Despite an uptick the last two years, housing activity remains a smaller share of GDP than it was in even the worst of the post-World War II era recessions.
  
  
  7%
  6
  5
  4
  3
  2
  3.11%
  1950
  1960
  1970
  1980
  1990
  2000
  2013
  Long-term average
  
  
  
  
  Source: Bureau of Economic Analysis
  So what is holding housing back?
  
  Sure, a glut of housing was built during the last great mania, and in some markets buyers are still working through those supplies. Bank lending is only now thawing, both for homebuilders and buyers. But those restraining factors have eased a lot in the last few years. The bigger thing holding back housing is simply demand. Fewer people can or want to fulfill the American dream of starting a household of their own.
  
  It may yet prove to be temporary, but for now at least, millions more people are doubling up with roommates, living at home with parents and otherwise finding ways to avoid doing the one thing that would get the housing economy back to normal: buying a home.

http://www.nytimes.com/2014/04/27/u...icmst=1388552400000&bicmet=1420088400000&_r=2

long article

 

[TLR Is Mental Poison]

Feds need to let rates go up and govt needs to stop propping up the market. We are struggling to find something decent in a good school district for under 300K

 

[Domingo Halliburton]

Feds need to let rates go up and govt needs to stop propping up the market. We are struggling to find something decent in a good school district for under 300K

the fed isn't raising rates for another 2-3 years. But rates are probably 100 basis points higher than they were a year ago.

 

[Wild self]

Feds need to let rates go up and govt needs to stop propping up the market. We are struggling to find something decent in a good school district for under 300K

Yeah, the disparity is insane, on top of the economy producing fewer and fewer good paying jobs.

 

[ProfessionallyTrill]

I work in a real estate office. Aint nobody buyin homes like that at all

 

[TLR Is Mental Poison]

the fed isn't raising rates for another 2-3 years. But rates are probably 100 basis points higher than they were a year ago.

Yeah, the disparity is insane, on top of the economy producing fewer and fewer good paying jobs.

Labor Shortages Pop Up in Many U.S. Cities - Businessweek

We haven't fully recovered yet and UE rates are still useless... similarly I'm sure folks like @DEAD7 would claim folks are having trouble hiring because the labor market is being distorted by liberal power grabs like UE, welfare, minimum wage etc

But it does seem we have turned a corner. The fact that housing is getting better is a pretty strong positive indicator.

 

[burner]

there's a lot of empty houses ,high rises & commercial space being held by investment companies

 

[DEAD7]

Labor Shortages Pop Up in Many U.S. Cities - Businessweek

We haven't fully recovered yet and UE rates are still useless... similarly I'm sure folks like @DEAD7 would claim folks are having trouble hiring because the labor market is being distorted by liberal power grabs like UE, welfare, minimum wage etc

But it does seem we have turned a corner. The fact that housing is getting better is a pretty strong positive indicator.

just min wage.

 

[burner]

they oversaturated the markets in every sector & kept prices high

 

[TLR Is Mental Poison]

just min wage.

How would an artificially high wage floor make it difficult to find people to hire

 

[DEAD7]

How would an artificially high wage floor make it difficult to find people to hire

By reducing access to human capital(entry level jobs), you reduce the pool of people with the knowledge in demand.

Back in the day it was common for young men to enter industries for little to no pay simply to "learn the business"(increase their human capital). This practice has been killed by the minimum wage law, and what we have now is a system(run by bigots) that depends on an over priced college degree(and in many cases a masters) further distorting the picture.

Spoiler

I would have jumped at the chance to work(for free) at an engineering plant or tech company and learn the business hands after high school.

... and of course, blacks are hurt by this the most

 

[TLR Is Mental Poison]

By reducing access to human capital(entry level jobs), you reduce the pool of people with the knowledge in demand.

Back in the day it was common for young men to enter industries for little to no pay simply to "learn the business"(increase their human capital). This practice has been killed by the minimum wage law, and what we have now is a system(run by bigots) that depends on an over priced college degree(and in many cases a masters) further distorting the picture.

Spoiler

I would have jumped at the chance to work(for free) at an engineering plant or tech company and learn the business hands after high school.

... and needless to say, but blacks are hurt by this the most

Back in what day? Back when union participation was 3x higher by % than now? Link me to something documenting this era when men would work for free for a chance to learn something

Not to mention, unpaid internships are at an all time high

Unpaid Internships for Graduates Now the New Norm? | Mehroz Baig

So I'm a little confused.... seems like the exact opposite of what you claim is happening...

 

[DEAD7]

Back in what day? Back when union participation was 3x higher by % than now? Link me to something documenting this era when men would work for free for a chance to learn something

Not to mention, unpaid internships are at an all time high

Unpaid Internships for Graduates Now the New Norm? | Mehroz Baig
So I'm a little confused.... seems like the exact opposite of what you claim is happening...

I'll dig up the links you requested, but to your second point about internships. Those are completely different from what I'm talking about, and very narrow in comparison. There are legal requirements and limitations on internships that keep internships from being as beneficial(to our economy) as they could be.

 

[Yapdatfool]

There are legal requirements and limitations on internships that keep internships from being as beneficial(to our economy) as they could be.

How so??

 

[TLR Is Mental Poison]

I'll dig up the links you requested, but to your second point about internships.

Those are completely different from what I'm talking about, and very narrow in comparison. There are legal requirements and limitations on internships that keep internships from being as beneficial(to our economy) as they could be.

What are you talking about then? Give us an example.