The Intelligence from The Economist Abodes well? The housing crash that wasn’t
4 snips
Jun 20, 2023 
Callum Williams, Senior economics writer at The Economist, dives into the stubbornly high property prices in the West, defying financial expectations. He discusses the surprising resilience of housing markets despite rising interest rates and inflation, contrasting today with the 2008 crisis. The conversation also examines Botswana's diamond industry and its potential challenges, while touching on the plight of Georgia's peach farmers facing a catastrophic freeze. Innovative strategies are explored as farmers adapt to climate change, revealing their deep connection to the land.
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Resilient House Prices
- House prices remain unexpectedly high despite rising interest rates and slowing economies.
- This contrasts with predictions of a market crash, showing resilience in the housing market.
Reasons for Housing Market Resilience
- Three factors explain resilient house prices: high net migration, strong household finances, and shifting housing preferences.
- Increased migration adds to housing demand, supporting the market, and wealthier households can absorb higher mortgage rates.
Potential Lagged Effects
- A potential lag in the effects of rising mortgage rates might still lead to future house price corrections.
- However, current data like stable construction employment doesn't indicate an impending bust.