#USHouseMarketStructureDraft
#USHouseMarketStructureDraft
1. Market Type
The U.S. housing market functions as a monopolistic competition, characterized by:
Many buyers and sellers
Product differentiation (by location, size, type, amenities)
Imperfect information
Moderate barriers to entry (zoning laws, capital requirements)
2. Key Segments
Primary Market: New home sales (developers, builders)
Secondary Market: Resale of existing homes
Rental Market: Leases managed by landlords or property management firms
Mortgage Market: Loans for housing purchases (banks, credit unions, mortgage companies)
3. Major Players
Homeowners & Renters
Real Estate Agents/Brokers
Real Estate Developers & Builders
Financial Institutions (Mortgage Lenders)
Government Agencies (e.g., FHA, HUD, Fannie Mae, Freddie Mac)
Investors (Institutional and Private)
4. Regulations & Influences
Zoning and Land Use Laws
Federal Policies and Subsidies
Interest Rates set by the Federal Reserve
Housing Assistance Programs
Tax Incentives (Mortgage Interest Deduction)
5. Pricing Mechanism
Determined by supply and demand, heavily influenced by:
Location
Employment trends
Interest rates
Construction costs
Government policies
6. Challenges
Affordability crisis in urban centers
Supply shortages
Rising mortgage rates
Institutional investment distorting supply
Racial and socioeconomic housing disparities