Can the Fed pull off a controlled slowdown of the housing market?
By the first quarter of the year the increase in American house prices over the previous two years, at 37%, was the fastest on record.
That rapid growth is a problem because it feeds into rents, which in turn contribute to headline inflation.
Cooling a hot property market by just enough to quell inflation is one thing. Deflating a bubble without popping it is another.
The Economist 23 June 2022
Home ownership - the West’s biggest economic-policy mistake
It is an obsession that undermines growth, fairness and public faith in capitalism
A trillion dollars of dud mortgages blew up the financial system in 2007-08.
But just as pernicious is the creeping dysfunction that housing has created over decades: vibrant cities without space to grow; ageing homeowners sitting in half-empty homes who are keen to protect their view; and a generation of young people who cannot easily afford to rent or buy and think capitalism has let them down.
As our special report this week explains, much of the blame lies with warped housing policies that date back to the second world war
The Economist 16 June 2020
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