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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.

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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Page updated by: Nora Richardson