Economics Article



Economics Article

There are several macroeconomic factors that affect the house buying behavior, and information about such factors would interests different readers including people purchasing home and other stakeholders. These factors affect the housing demand and supply and the prices of housing. Hence, the purchase decisions are affected by such factors. Regulators would also be interested to read these factors as it could affect the policies and decisions. In this paper, we will assume that housing finance corporation provide finances to the people for their personal homes and they also assist purchasers in purchasing behavior. We will discusss the factors that would be addressed in the magazine being published by Housing Finance Coporation.

Impact of Financial Crises on UK Housing Market

The 2008 financial crisis accelerated adjustments in an already weakening housing market. Prices and demand for housing fell substantially when credit dried up in the wake of the collapse of the US subprime mortgage market. However, compared to the preceding increases, price falls have generally been fairly modest - except in Northern Ireland, where the market is affected by developments in the neighbouring Republic of Ireland. After 2009, the prices have started to move up again and are now on average only about 11% below their peak level, albeit showing renewed signs of weakness (Schwartz, 2010).

Tax System

The increase in the homeownership rate stalled after 2003 mainly as a consequence of reduced affordability. Around two-thirds of US households are owner-occupiers, which has long been encouraged by housing and tax policies. House prices are currently high relative to household income. The ratio of median house prices to median annual employee earnings in United States rose from 3.5 in 1997 to 7.2 at the peak of the market in 2007 and, after falling back to 6.3 in 2009, rebounded to 7.0 ...