Keywords: Housing Market, Residential Housing, Government Policy
In this research, we will measure the impact that the government policy have on the residential housing market. Overall, the house prices in the United States did not change much from 1980 to 2016. The average price of a residential property is relatively the same at less than $200,000 per residential unit during these periods ((American House Prices 2016). As a result, we may not be able to determine how much impact these government policy have on the residential market. However, when looking at a specific region such as New York or San Francisco, we can determine the government policy’ effect. Besides the government policy, these following factors also move the housing price:
A. Demographics 1. Data about age, race, gender, migration patterns and population growth. 2. How would this affect the demand for second homes in popular vacation areas as more people start to retire? Or 3. How would this affect the demand for larger homes if incomes are smaller and the children have all moved out? B. Interest Rates:
1. changes in interest rates significantly impact a buyer’s ability to purchase a residential property 2. Interest rate goes lower which leads to a lower cost to acquire a mortgage. This create higher demand for real estate, which pushes up the prices. C. The Economy 1. economic indicators: i. GDP, ii. employment data, iii. manufacturing activity and iv. the prices of goods 2. national and international policies
The Government Policies
Since its all-time high in 2006, the housing market in the United States is very volatile in the past few decades (American House Prices 2016). These fluctuations occur because of many recessions and the economy’s boom and bust periods. As a result, the government wants to adjust the economy by implementing many fiscal and monetary policies which purposely impacts the real estate property supply & demand and its prices. Below are some forms of government subsidies:
For instance, in 2009 the first-time homebuyer’s tax credit to homeowners helped leads to 900,000 homebuyers to buy homes.
American house prices: Realty check (2016, August 24). Retrieved February 6, 2017, from The Economist, http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20