Economist Podcasts
Moves over: American house prices
Sep 8, 2023
Simon Rabinovich, U.S. economics editor for The Economist, shares insights on the surprising resilience of the American housing market amid rising interest rates. He explores how unique aspects of the mortgage market defy expectations of falling prices, complicating homeownership for many. Additionally, Anne Rowe honors Isabel Crook, a Canadian anthropologist who embraced China's communist changes, reflecting on her unique journey and the cultural shifts she witnessed. The conversation also touches on the complexities of elective egg freezing and its real-life success rates for women.
23:04
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Quick takeaways
- Despite rising mortgage rates, the US housing market continues to thrive due to a shortage of available housing inventory caused by homeowners locking in low mortgage rates.
- A study on elective egg freezing shows that the success rate varies by age and the number of eggs stored, providing a means to slow down the decline in fertility as women age.
Deep dives
US Housing Market Resilience
Despite rising mortgage rates, the US housing market continues to thrive with house prices reaching record highs. The usual relationship between interest rates and house prices, where an increase in rates leads to a decrease in prices, is not holding true this time. The reason for this anomaly is the freeze in the housing market due to many homeowners locking in low mortgage rates, causing a shortage of available housing inventory. While this shortage affects demand, it is balanced by a strong new home market and increased spending on remodeling, which has actually had positive macroeconomic consequences.
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