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...
building home pace prices pushing showing until
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.
moved prices rent sale
Historically, rent prices and sale prices have moved together.
california economic home prices ripple suffered trouble
Hawaii's home prices suffered in the 1990s because of economic trouble in Japan, ... If home prices in California reverse, it will have ripple effects.
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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.
housing leading leaving money mortgage predict prices rule secondary surprise
I wouldn't necessarily predict this would be a trigger, but I wouldn't rule it out either. It wouldn't surprise me if you see money leaving the secondary mortgage market, leading housing prices to fall.
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People are willing to pay them because there is an expectation that prices will continue to rise. Once people don't have that expectation, things will change.
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Normally when you talk about housing bubbles bursting, you're talking about a specific local market. But we've never had a nationwide run-up in home prices like this. I don't think it's realistic to think the decline won't also be national. I think a 15 percent nationwide decline is very plausible. In many bubble areas, could be looking at 20-25, maybe 30 percent declines.
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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.
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Home prices are going through the roof, forcing people to turn to exotic loans and unorthodox financing. These people have no room for error.
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If home prices level off, that can knock down growth by 1 or 2 percentage points, from 3.5 percent to 1.5 percent.
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People are really stretched. They are banking on everything turning out right for them. That they won't lose their jobs, that they won't run into unexpected expenses. They're betting that the housing market will continue to appreciate.
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People are always trying to explain the lack of questions as saying there's a consensus around monetary policy, but there's anything but a consensus on monetary policy. What upsets me more than anything is no one is asking serious questions.
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It does pull a lot of money out of people's pockets. Even if it doesn't go back up much, it translates to a 50-to-60-cents-a-gallon gas tax. But for the borrowing that people were willing to do, it probably would have led to recession.