How the Economy is Affected by the Home-Building Market

Currently, many economists are arguing over what causes the home-building market to suffer. Some speculate that the supply is not meeting the current demands, since there are still many homeless families. Everyone in the home-building field is feeling the crunch, due to the market's unrest. According to Tan (2007), the recent Subprime mortgage crisis is still a danger, even though the news has stopped discussing it. Many economists believe that the economic demand, inequalities, and policies are affected by the market's unrest. Others are blaming the recent "natural disasters" for a "slower market" (Cashell & Labonte 2005) with more demand for homes. No matter what the differences, economist "wonder who will be holding the bag" (Tan, 2007), once the dust has finally settled.

Economic Demands

Housing Shortage

According to Lowe (2002), the lack of affordable housing in the U.S. is causing the homeless rate to rise considerably. Over, "16.5 million households" are spending "more than half of their income" on a place to call home. However, many families are renting houses or are considered to be living in "severely sub standardized housing". Many of these families would become homeless if they lose the job or get sick, because they living paycheck to paycheck. In 2002, "5 million homes" were needed for families, who are homeless and in need of "governmental housing assistance". According to Lowe (2002), many people can't pay the fair-market price for a house, even with two people working. Hopefully, the government can fund a program, which will help these families find affordable housing in the near future. Furthermore, time will tell, whether the supply will finally meet the current demand for housing.

Natural Disasters