Changes in Demand – Fast and Variable

  • Interest Rates. Interest rates have a huge impact on the demand for houses and interest rates can change very fast relative to population and income.
  • Lending Standards. Mortgage credit standards can change demand fast or slow, and a little or a lot, depending on the change in mortgage credit standards.
  • Investors. Investors can jump into and out of the single-family house market relatively fast and for many different reasons.

Changes in Demand – Slow and Steady

  • Income. As area incomes increase, more buyers are willing and able to spend more on buying houses.
  • Population. As population increases, the additional households bring additional money to chase the houses in the area.

Next: Secret #10 – The Economics of Houses are Different

76 Secrets of U.S. Home Ownership – Table of Contents