The housing market is a great illustration of the supply and demand concepts discussed this week. The events of the past 5-7 years provide a clear illustration of how changes in supply and demand affect prices and quantities in markets.
Here are some additional questions to answer to help get discussion flowing: - What factors affect the supply of homes?
- Why did prices fall during the recent recession? Were the drop in prices caused by decreases in supply, demand or both?
- During the recession, rents on leased homes and apartments rose. Why might this have happened?