After an extraordinary 15-year run in terms of prices, sales of existing homes, and new construction, the U.S. housing market began to turn distinctly downward in early 2006. This brief helps understand why the market has shifted from hot to, at a minimum, cool. The brief recaps some of the factors that contributed to this housing run, such as demographics, a very liquid mortgage market, investment choices, foreign demand, supply restrictions, and market psychology and expectations. It also discusses several the factors that will determine how long and steep this reversal of housing fortune might be.
This policy brief complements the Center's 2006 Working Paper, The Lack of Affordable Housing in New England: How Big a Problem? Why Is It Growing? What Are We Doing About It?
To review other Center research about housing, please visit our research index.