Dean Baker
Dean Baker
Dean Bakeris an American macroeconomist and co-founder of the Center for Economic and Policy Research, with Mark Weisbrot. He has been a senior economist at the Economic Policy Institute and an assistant professor of economics at Bucknell University. He has a Ph.D. in economics from the University of Michigan...
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behind current element housing large
There is a large psychological element behind current housing prices,
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We've backed ourselves into a very dangerous situation. The economy is dependent on everyone consuming like crazy. If everyone heard my diatribe and said, 'Yeah, we better start saving,' the economy would go into a recession.
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With the housing bubble now having generated comparable levels of unsustainable wealth, the economy faces even greater dangers today than it did when the stock market crashed.
building homes increasing quarter seems
When you see it increasing quarter after quarter, there seems to be something going on here. We're building more homes than are being filled.
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Until the psychology starts to shift or interest rates jump up, the market will probably stay strong, ... So far we haven't seen that. We've had a lot of stories on housing bubbles lately. Maybe that will affect the psychology.
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The problem is that few people recognize it for the gamble that it is.
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WE WERE shocking today and were given a lesson in finishing as they had nine chances and took six of them.
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We're building at a 2 million-a-year pace, which is more than demand, and we're going to keep building at that pace until home prices correct, ... It's already showing up in the rental market, oversupply is pushing down rental prices.
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The optimistic scenario gives you about 2 million jobs next year -- about 180,000 a month. If I had to make my best bet, I'd say we'll have level home prices and growth of about 1.5 percent for the year. There'll be job creation of about 80,000 or 90,000 a month.
home prices run
There has never been a run up in home prices like this.
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Home and rental prices will come back together by home prices falling. I don't think landlords will be in any position to raise rates too much.