Macroeconomics And The Housing Industry - 1193 Words

Macroeconomics and the Housing Industry Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1) Two economic factors affect supply in a stable housing market, price of related goods or similar houses, and the price of the good, best represented by style or size in the case of the housing market. The affluence of a community typically determines how much homes sell for in those communities, and therefore communities where a lot of people want to live become areas where average home prices are high. (Kumar, 1) There is little space in these affluent commun ities, and therefore little supply. A good example is New York City, where no homes are available, only apartment buildings, and very few apartments are actively exchanged each year. Supply is also affected by the growth of a community over time. For example, a new city with 10,000 homes, expanding rapidly, will have low supply and therefore more expensive homes. An older city, however, with 50,000 homes and fewer and fewer new residents, will seeShow MoreRelated Impact of Macroeconomics on the Housing Industry Essay599 Words   |  3 Pagesbetter understand the real impact macroeconomics has in an economy or a particular industry, it is better to define what macroeconomics is and what it attempts to study. Contrary from microeconomics which studies the impact that individuals or companies have in a local economy, macroeconomics focuses on the behavior of the economy or industries as a whole, in a national or global perspective. (Investopedia.com, 2015) However, microeconomics and macroeconomics are interdependent and complement eachRead MoreHow Macroeconomic Issues Affect the Housing Industry1647 Words   |  7 PagesHousing Industry The housing industry has been around for many years. It is an important industry and one that will always have a necessity to exist since it creates a product that is one of the essentials of human life, housing. Economics play an important role in the housing industry along with all other industries. There are several factors that can influence the housing industry economically. Supply and demand coupled with price elasticity can affect the housing industry. Negative andRead MoreSupply and Demand Simulation939 Words   |  4 Pagesindividual purchase decisions. There are also macroeconomic concepts in the simulation. We can think of things like taxes, which are an element of fiscal policy and therefore a macroeconomic variable, as affecting the supply and demand curve for a given good. If taxes are increased, for example, the demand curve for discretionary goods might shift, moving that market out of equilibrium position. Thus, we can see clearly the link between the broad-level macroeconomic concept of taxation and fiscal policyRead MoreThe Monetary Value That Represents All Of The Products Made A Country Is Gross Domestic Product1742 Words   |  7 Pagesis doing and how much I should expect for my salary because if the prices have been increasing, then I would look for a job that pays higher so that I could have a comfortable living. Housing starts and building permits are both figures used to convey the strength of real-estate is. They are different in that housing starts show how many houses are under construction while building permits shows how many permits are issued. These numbers are significant to me right now because my family is tryingRead MoreImpact Of The Construction Sector On The Uk Economy Essay1084 Words   |  5 Pagesâ€Å"The construction industry is a sector of the national economy engaged in preparation of land and construction, alteration, and repair of buildings, structures, and other real property† (BusinessDictionary, 2016). This sector in recent years has experienced declines in growth and has growing tendencies of entering a recession. It has to be recognised that it is an extremely volatile industry which has adverse effects on macroeconomic objectives some of which includes economic growth and unemploymentRead MoreSupply and Demand Simulation Essay1024 Words   |  5 Pagessi mulation names the user the property manager; responsible for vacation residents, new pricing for units, and advertising. The property manager makes decisions in circumstances including the changing of supply cure, demand curve, microeconomics, macroeconomics, and the equilibrium of price and quantity. All of these decisions move the business along as conditions change around it. Demand Curve Shift Lintech Expansion The demand curve follows a distinct line unless some other factor causes the lineRead MoreThe Government ´s Role in the Success of Singapore Essay1445 Words   |  6 PagesYes, I agree that a huge part of Singapore’s economic success has been built on the government’s ability to ensure macroeconomic stability as well as build long-term growth. To ensure macroeconomic stability, fiscal policy, which is the usage of government expenditures and taxes, and monetary policy, which is the changing of interest rates and quantity of money in the economy, and supply-side policies, that look into the strengthening the production capabilities of companies, have to be implementedRead MorePrivate Investments in Human Capital Growth in Asian Countries683 Words   |  3 PagesThis essay will be explaining that why macroeconomics stability is one of the key success factor that contributes to the tremendous economic growth in the last forty years of development in asian countries lik e singapore, hong kong and south korea. The objective of a government economic policy is to achieve stability. A volatile business cycle is not ideal to the economy as the rapid growth of an economy with high demand and inflation will lead to a recession as the long term inflationary growthRead MoreThe rapid rise of economies in Asia over the past few decades has been phenomenal. According to1200 Words   |  5 Pagessuggest that Asia will continue to account for more than 50% of the global world growth in the coming decade, surpassing the advanced global economies in purchasing power parity terms to become the world’s largest economic region by 2020.† Many macroeconomic factors have led to the rapid growth of economies in Asian countries over the past few decades resulting in .. The 08 HIPAEs are diverse in Illustration on Singapore 1. Introduction This paper intends to provide a short history of Singapore afterRead MoreUop Eco 365 Week 2 Individual Assignment1003 Words   |  5 Pagesthings like new employers moving into the area, rent control laws being put into effect and the change in trend from apartments to homeownership and back again. Microeconomics Versus Macroeconomics In this simulation, concepts from the study of both microeconomics and macroeconomics are observed. Macroeconomics covers factors that affect the whole economy of an area, not just one company. Events such as scenario four’s introduction of Lintech into the area changes the economy of the entire city