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Low interest rates _should have_ allowed builders to build more homes too, but they haven't.

jackcosgrove 3y ago
In the US housing supply did keep pace with demand until about 2006. Witness the reversion of prices to historical norms (briefly) after the housing crash. So the response of home builders to interest rates is mixed. The problem here at least is that many homebuilders went bankrupt after the housing crash and the supply of skills and willingness to build homes decreased for a generation.
voisin 3y ago
House building was stronger when interest rates were low, but still constrained by bad zoning and labour availability.
- brutus1213 3y ago
  I hunted for my question and found an interesting Economics Explained video on youtube. That hypothesizes that Baby Boomers essentially voted to change policies to favor themselves as a cohort.
  - matt-p 3y ago
    Setting aside the 'how' that's certainly what the outcome has been, at least in the UK. We desperately need a pro growth government next. Desperately.
  - jackcosgrove 3y ago
    Was that the one saying, "you would expect a large generation to be poorer than a subsequent smaller generation because of more intragenerational competition, but actually the larger generation can use politics to favor themselves precisely because they are more numerous?" https://youtu.be/PkJlTKUaF3Q https://youtu.be/PkJlTKUaF3Q The situation is even more extreme in places like Italy where the young are even less numerous compared to the old than in the UK. It's the political equivalent to deflation. If every generation is smaller than the last, you end up with a gerontocracy and no-change society. To maintain pro-growth policies, you need a critical mass of young people who embrace change and want to grow. Otherwise you get stuck in a positive feedback loop of more and more power and money concentrated among the old which depresses the birthrate.
    - brutus1213 3y ago
      Yup .. that's the one.

In the US housing supply did keep pace with demand until about 2006. Witness the reversion of prices to historical norms (briefly) after the housing crash. So the response of home builders to interest rates is mixed. The problem here at least is that many homebuilders went bankrupt after the housing crash and the supply of skills and willingness to build homes decreased for a generation.

voisin 3y ago

House building was stronger when interest rates were low, but still constrained by bad zoning and labour availability.

brutus1213 3y ago
I hunted for my question and found an interesting Economics Explained video on youtube. That hypothesizes that Baby Boomers essentially voted to change policies to favor themselves as a cohort.
- matt-p 3y ago
  Setting aside the 'how' that's certainly what the outcome has been, at least in the UK. We desperately need a pro growth government next. Desperately.
- jackcosgrove 3y ago
  Was that the one saying, "you would expect a large generation to be poorer than a subsequent smaller generation because of more intragenerational competition, but actually the larger generation can use politics to favor themselves precisely because they are more numerous?" https://youtu.be/PkJlTKUaF3Q https://youtu.be/PkJlTKUaF3Q The situation is even more extreme in places like Italy where the young are even less numerous compared to the old than in the UK. It's the political equivalent to deflation. If every generation is smaller than the last, you end up with a gerontocracy and no-change society. To maintain pro-growth policies, you need a critical mass of young people who embrace change and want to grow. Otherwise you get stuck in a positive feedback loop of more and more power and money concentrated among the old which depresses the birthrate.
  - brutus1213 3y ago
    Yup .. that's the one.