Homes, Housing, & The Economy

Home ownership (or owner occupancy) is one way governments and economists have tried to organise the housing market. Homeownership is promoted is because it creates an asset for individuals to invest and accumulate their wealth. But, the 2008 financial crisis demonstrated that even mortgage payments can easily be much riskier than they seem.

Renting refers to when people pay for using property they don’t actually own. The people that rent are called tenants and the people that own property are called landlords.

House prices increase when houses aren’t built quickly enough to meet demand. There’s several reasons for why this could be happening: a lack of available land, low government investment, or regulations preventing people from building on green space are a few possibilities.

Housing bubbles come from what’s called speculation. Speculation is when investors buy something expecting to make money off the fact that its price will most likely rise in the future. As speculators buy up more houses to make money from price increases, they actually push up the price of houses by increasing the demand.