Home Building and the Economy

Home Building and the Economy

Chris Barker

Aaron Crosson

Deb Helton

Tim Johnson

Mr. Hector Morales

Business Economics I ECO/360

October 29, 2007

Abstract

The housing industry is a major part of the US economy. Demand is high during favorable economic times, such as those recently witnessed. Unfortunately, as has been witnessed in the housing industry, high demand times can result in the production of goods outweighing the supply needed leaving higher volumes of inventory when shifts in the economy arise. Nevertheless, a healthy job market, continuation of higher education which results in higher individual and family incomes, favorable interest rates, and sufficient money supply will most definitely help in ensuring the success of the industry as well as the future of the United States' economy

Home Building and the Economy

Every individual in the world has certain wants and needs to fulfill.

English: Extract from the text of the original doc...

Gross Domestic Product (GDP) growth rate for OECD-...

World map showing countries by nominal GDP per cap...

The need for shelter is very important and ranks at the top of the persons needs right along with food and health. As individuals mature, the need to find housing for an individual becomes a very important goal to fulfill. Anyone can walk along a residential street and look at homes for sale, but do they truly understand all the economic factors that were working together to allow the homes to be built in the first place. The economy is a complicated system overall, but how does it affect the home building market specifically and how can understanding this system help us to better understand when to buy or not buy a new home?

The housing bubble has persisted since 2001 in the United States. The bubble has been most apparent in populated areas of the United States, for instance, Los Angeles, New York, and areas in the Midwest like...