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Hot Topics: Housing Market and the Economy

Worries are building about the housing market's effect on the overall economy. Will the coming of spring and summer, typically the strong seasons for home buyers and sellers, spell relief for the housing market? The books, reports and articles listed will discuss this issue.

Selected articles

Due to contractual arrangements, access to some articles may be restricted to the Stanford community, and subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Inclusion below does not imply University endorsement of the ideas expressed.

Housing Prices and the Economy: Is There Any Good News? Portfolioist, 4/3/12
New data shows that housing prices are not improving.
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Rents Keep Rising, Even as Housing Prices Fall. New York Times, 2/24/12
The housing market remains a potent drag on the economy as home prices continue to slip, foreclosed homes fill some neighborhoods and millions of construction workers scramble for jobs.
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Making the Housing Market Work Again. Hoover Digest, 2/1/12
Analyzing past mistakes to build long-term policy solutions.
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Will Europe's financial crisis stall foreign home buying activity? Forbes, 1/13/12
Since the housing bubble burst, U.S. real estate has become an increasingly appealing investment opportunity to international house hunters.
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Realtor Revise: Housing Downturn Was Worse Than We Thought. Time, 12/15/11
It may not seem possible, but the horrific housing market crash of the past few years has actually been worse than we previously thought.
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S&P Interview with Professors Robert Shiller and Chip Case on the U.S. Housing Market. S&P HousingViews, 11/3/11
Maureen Maitland, Vice President at S&P Indices, interviews Professor Karl “Chip” Case and Professor Robert Shiller, co-founders of the S&P/Case-Shiller Home Price Index, on the housing market, what’s occurring with the Indices and how they foresee the Indices impacting the markets.
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Gloom Grips Consumers, and It May Be Home Prices. New York Times, 10/18/11
Americans have lost a vast amount of wealth, and they have lost faith in housing as an investment. They lack money, and they lack the confidence that they will have more money tomorrow.
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Analysis: Housing market to limp along, government hands tied. Reuters, 9/23/11
The Fed's twist will help, but it won't be enough to turn around the troubled U.S. housing sector.
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U.S. Is Set to Sue a Dozen Big Banks Over Mortgages. New York Times, 9/1/11
The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.
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White House Seeks Ways to Stem Glut of Foreclosures. Bloomberg, 8/10/11
The Obama administration, aiming to boost a housing market showing little sign of recovery from the 2008 credit crisis, is seeking ideas for renting, selling or disposing of foreclosed homes controlled by the government.
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Sales of Existing U.S. Homes Fall, Partly Due to Cancellations. The Market Oracle, 7/20/11
Sales of existing homes declined 0.8% to an annual rate of 4.77 million units in June.
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Fed’s Yellen Says U.S. Housing Market Will Undergo a ‘Drawn-out’ Recovery. Bloomberg, 6/9/11
Federal Reserve Vice Chairman Janet Yellen said the housing market will undergo a “long, drawn-out recovery” and the Fed is working with other agencies to prevent foreclosures and clear the stock of vacant properties.
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May 2011 U. S. Economic and Housing Market Outlook. New York Times, 5/12/11
Freddie Mac (OTC: FMCC) released its U.S. Economic and Housing Market Outlook for May showing a pick-up in economic growth in the second half of 2011 but with unemployment lingering above 8 percent through year-end.
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Young Home Buyers Will Lead Housing Market Recovery, Says NAHB. NAHB, 3/17/11
Generation X –young families and adults ages 31 to 45 – are likely to lead the home buying recovery as it gets underway, according to real estate experts.
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4 Reasons Home Prices Are Likely To Keep Falling. NPR, 2/22/11
It's been almost five years since the housing bubble peaked, and the bust isn't over yet.
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Foreclosures up in San Francisco. San Francisco Chronicle, 1/30/11
San Francisco, once a Teflon-coated real estate market, is experiencing more fallout as the housing downturn and foreclosure crisis grind into their fourth year.
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U.S. Economy and the Housing Market. C-SPAN, 12/6/10
Lawrence Yun gave an update on the housing market, recent trends in home sales, and the forecast for the remainder of the year.
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The Bears and the State of Housing. New York Times, 9/7/10
Of all the uncertainties in our halting economic recovery, the housing market may be the most confusing of all.
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Housing Market Plunged in July, Fueling Anxiety. New York Times, 8/24/10
Americans’ long infatuation with owning a home, which even the economic collapse of 2008 could not kill, shuddered and stalled last month.
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Housing Fades as a Means to Build Wealth, Analysts Say. New York Times, 8/22/10
Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg.
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6 Reasons the Housing Market Hasn't Recovered. U.S. News & World Report, 7/16/10
Four years after the housing bubble popped, the American real estate market has yet to launch a sustainable recovery.
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Building Is Booming in a City of Empty Houses. New York Times, 5/15/10
Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.
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Don’t Bet the Farm on the Housing Recovery. New York Times, 4/9/10
Much hope has been pinned on the recovery in home prices that began about a year ago. A long-lasting housing recovery might provide a balm to households, mortgage lenders and the entire United States economy.
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Program Will Pay Homeowners to Sell at a Loss. New York Times, 3/7/10
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
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No Help in Sight, More Homeowners Walk Away. New York Times, 2/2/10
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
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Five Key Housing Issues to Watch in 2010. WSJ, 1/1/10
The housing market, which brought the economy to its knees in 2008, struggled to recover in 2009. The modest gains of the past year can be credited in many ways to federal support that will be removed at some point in 2010.
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Housing outlook for 2010. Fortune, 12/9/09
This year the housing market showed signs of life. But with foreclosures and unemployment climbing, prices have further to fall.
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Home Prices May Be Nearing a New Dip. New York Times, 11/24/09
Home prices are enduring an early winter chill, raising the odds that the economy may suffer another jolt while it is still weak.
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A Bounce? Indeed. A Boom? Not Yet. New York Times, 10/10/09
The sudden rise in home prices suggests that the psychology of the market has shifted substantially. But what should we expect in the months ahead?
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The housing recovery mirage. Fortune, 9/2/09
With home prices rising even in California, it might seem that the worst is over for the housing market. But the good vibrations may be short lived.
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Where Home Prices Crashed Early, Signs of a Rebound. New York Times, 5/4/09
Sacramento was among the first cities in the nation to fall victim to the real estate collapse. Now it seems to be in the earliest stages of a recovery, a hopeful sign for an economy mired in trouble and anxiety.
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Home sales sink unexpectedly, lowest since 1997. BusinessWeek, 2/25/09
Sales of existing U.S. homes sank unexpectedly last month to the lowest level in nearly 12 years as potential buyers worried about their jobs and awaited details of President Barack Obama's plans to stabilize the housing market.
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U.S. Housing Market: 1982 vs. 2009. Seeking Alpha, 2/1/09
Have people forgotten how bad the real estate market crashed in the early 1980s? Apparently so. Here's a brief overview.
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Schooled in Home Economics. Mortgage Banking, January 2009
The article presents the 2009 outlook on the status of the U.S. economy. Accordingly, the country's economic condition will remain unstable until the home-price depreciation will recover as well as the revival of profitable activities.
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Housing declines match 20-year record. San Francisco Chronicle, 1/27/09
The closely watched Standard & Poor's/Case-Shiller 10-City Composite Index plummeted 19.1 percent from a year ago, matching last month's decline, the biggest in more than 20 years of available data.
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7 Ways for Obama to Save the Housing Market. US News & World Report, 11/14/08
The Great Housing Bailout of 2009 is coming. The recent announcement by Fannie Mae, Freddie Mac, and Citigroup that they plan to reduce mortgage payments for hundreds of thousands of borrowers facing foreclosures may well be just the beginning of help for homeowners.
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Housing-Price Economist Sees Market as Near Bottom. WSJ, 9/12/08
Wellesley College economist Karl Case, the "Case" in the widely followed S&P/Case-Shiller index of U.S. housing prices, says he thinks that the housing market may be near a bottom. If he is right, financial firms may be able to breathe a sigh of relief.
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In the Central Valley, the Ruins of the Housing Bust. New York Times, 8/23/08
In Merced, Calif., frames of houses in the Riverstone development have bleached in the sun for more than a year. Three-fourths of existing-home sales in Merced County are foreclosures.
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Housing starts dip to lowest level since March '91. Associated Press, 8/19/08
Construction of homes and apartments fell in July to the lowest level in more than 17 years, the government reported Tuesday.
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More Articles

Woes Afflicting Mortgage Giants Raise Loan Rates. New York Times, 7/23/08
Mortgage rates are rising because of the troubles at the loan finance giants Fannie Mae and Freddie Mac, threatening to deal another blow to the faltering housing market.
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The Housing Abyss. BusinessWeek, 6/26/08
Why the worst may be yet to come as forces battering the market gain strength. And the remedy coming from Congress? It's likely to fall short of the mark.
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Downsizing the American home. Fortune, 6/4/08
During the housing bubble, KB Home priced out first-time homebuyers by building bigger. Its new, more modest model provides a glimpse of what the return of the housing market may look like.
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The Trouble in Housing Trickles Up. New York Times, 6/1/08
The nation’s housing woes have moved beyond subprime borrowers in working-class neighborhoods and into the realm of upper-middle-class homeowners.
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Homes sales get lift, but lid still on prices. San Francisco Chronicle, 5/22/08
The long slide in home sales may be nearing an end, but that doesn't mean prices are going to rise anytime soon.
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Long haul is best way to look at home prices. San Francisco Chronicle, 5/8/08
Nationwide, home prices in February were nearly 15 percent higher than they were in February 2004 and almost 75 percent higher than they were in February 2000, according to a 20-city index tracked by Standard & Poor's/Case-Shiller.
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Housing Woes in U.S. Spread Around Globe. New York Times, 4/14/08
The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India.
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Senate Approves Housing Relief Bill. New York Times, 4/11/08
The Senate on Thursday moved to stabilize the battered housing market by approving a bill to provide tax breaks for home builders and other businesses, a $7,000 tax credit for buyers of foreclosed homes, $150 million for counseling borrowers and $4 billion for local governments to buy foreclosed properties.
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Bay Area home prices drop a record 13.2%. San Francisco Chronicle, 3/26/08
National and local home values dropped at record paces in January, according to a widely watched industry index.
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The Affluent, Too, Couldn’t Resist Adjustable Rates. New York Times, 3/20/08
They took out adjustable-rate mortgages at the peak of the housing bubble to buy homes they would otherwise not be able to afford. Or they refinanced existing mortgages to take cash out. And now, two or three years later, the day of reckoning is here.
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Facing Default, Some Walk Out on New Homes. New York Times, 2/29/08
A new company in San Diego called You Walk Away that does just what its name says. For $995, it helps people walk away from their homes, ceding them to the banks in foreclosure.
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Some Cities Are Spared the Slide in Housing. New York Times, 2/15/08
The real estate market these days is a tale of two Americas, and one of them is not doing too badly.
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Housing Market to Stay Ugly in 2008. Associated Press, 12/10/07
Economists: More Foreclosures, Falling Home Prices and Sales May Usher in Recession Next Year.
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How low can they go? Fortune, 11/12/07
The article discusses the U.S. housing slump in 2007 and projected values for homes by 2012.
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A Real Estate Speculator Goes From Boom to Bust. New York Times, 11/9/07
The home foreclosure business was very good to Todd Haupt. He started buying and flipping foreclosed houses in 1994, when he was 20, and by 2000 he graduated to building homes.
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Bay Area should escape worst of the state's economic slump. San Francisco Chronicle, 9/12/07
California's economy is headed for a rough patch as the housing slump intensifies, but the Bay Area should fare much better than the rest of the state, according to a widely watched forecast.
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Home Truths about the Housing Market. Knowledge@Wharton, 9/5/07
The sub-prime mortgage crisis and the credit crunch that has followed in its aftermath are taking their toll on the housing market.
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New Home Construction at Lowest Level in Decade. New York Times, 8/16/07
Last month, the pace of new residential construction and the rate of building permits issued fell to their lowest points in more than a decade, the government reported. Compared with a year earlier, when the housing market was already in a state of decline, the picture has become even gloomier.
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Drywall Maker in Pain as Housing Suffers. New York Times, 8/7/07
Plenty of companies are absorbing the ill effects of the yearlong slump in housing construction and sales. But few have felt it as forcefully or as suddenly as the USG Corporation, the nation’s largest maker of drywall, the paper-wrapped plaster boards used to build walls in homes and offices.
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Top Lender Sees Mortgage Woes for ‘Good’ Risks. New York Times, 7/25/07
Countrywide Financial, the nation’s largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades.
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Bernanke: Subprime hit could top $100B. CNN, 7/19/07
Housing slump could hurt consumer spending; Fed is moving to protect consumers from predatory mortgage lending.
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Mortgages Give Wall St. New Worries. New York Times, 6/19/07
After the first cracks in the subprime mortgage business appeared late last year, several large lenders were forced into bankruptcy.
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The Spring of Home Sellers' Discontent. U.S. News & World Report, 6/10/07
Unsold houses pile up, and the bottom still seems far off.
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Housing Slump Pinches States in Pocketbook. New York Times, 4/7/07
State tax revenues around the country are growing far more slowly this year and in some cases falling below projections, a result of the housing market slowdown that has curbed voracious spending on real estate, building materials, furniture and other items.
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Bernanke allays subprime fears as Beazer faces probe. Reuters, 3/28/07
Testimony by the two top U.S. economic officials on Wednesday raised fresh concerns in financial markets about the deteriorating housing market, despite their view that subprime mortgage problems are "contained."
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Mortgage Trouble Clouds Homeownership Dream. New York Times, 3/17/07
Several large mortgage companies have stopped making new loans, and others have tightened lending standards.
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Mortgage Report Rattles Markets. Washington Post, 3/14/07
A national survey showing that a soaring number of homeowners failed to make their mortgage payments in the last quarter of 2006 rattled lawmakers in Washington and the markets in New York yesterday, as the Dow Jones industrial average plummeted 2 percent, or nearly 243 points.
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Crisis Looms in Market for Mortgages. New York Times, 3/11/07
Wall Street firms and entrepreneurs made fortunes issuing questionable securities, in this case pools of home loans taken out by risky borrowers. Bullish stock and credit analysts for some of those same Wall Street firms, which profited in the underwriting and rating of those investments, lulled investors with upbeat pronouncements even as loan defaults ballooned.
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Weak housing market weighs on job growth. MSNBC, 3/9/07
Since the middle of last year, a downturn in the U.S. housing market has taken its toll on a wide group of people and companies, clobbering homebuilders, condo flippers, borrowers with weak credit, lenders who oversold loans, and just about anyone with a home for sale.
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Subsiding. Economist, 3/3/07
The article reports that U.S. subprime home mortgage loan borrowers default on loans, creating instability in the financial markets. Goldman Sachs analysts state that direct macroeconomic effects of subprime stress are minute. Investors widely agreed until February 27, 2007, when the stock market plummeted.
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Housing Boom! Forbes, 2/26/07
The article focuses on the effects of the declining housing market on the economy of the United States. Housing stocks have increased by 24% in the last six months, indicating that the housing market is already making a comeback.
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Could Tremors in the Subprime Mortgage Market Be the First Signs of an Earthquake? Knowledge@Wharton, 2/21/07
For months, the steady drip of news about troubles in the subprime mortgage market looked no worse than one would expect: merely a comeuppance for lenders, borrowers and investors who should have known that high-interest loans to people with poor credit were risky.
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Stocks Fall on Housing Market Worries. San Francisco Chronicle. 11/14/06
Wall Street retreated Tuesday after Home Depot Inc.'s weak earnings reignited fears that the slumping housing market's effect on the economy may offset any benefits of slowing inflation.
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