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Houses Are Getting Bigger Again

The article “Houses Are Getting Bigger Again” by Kathleen Madigan was posted on March 19th, 2013. It discusses the current state of the housing market in the USA.

Kathleen Madigan analyses the reasons that made housing market grow. She thinks that it will help the economy, as labor input in building is increasing. The author states that one of the reasons is Federal Reserve’s policy. Interest rate is extremely low, so the sales of houses are increasing. Another main reason is the situation in the labor market. Unemployment rate is decreasing, so more people earn enough money to buy a house.

To my opinion, such situation is positive. It is socially beneficial, because more people are able to buy a house. It is also beneficial for economy as a whole. Such market tendency means that the incomes and living standards of people are increasing. As a result, more people are able to buy real estate. Such situation is also positive for the labor market, because there appear more offers of job for builders and brokers. However, such situation may also have some negative results. The demand for houses is increasing. Therefore, it may cause a lack of houses available for sale. In addition, a high demand and an inappropriate supply may cause increase of housing prices.

The article “American Seniors Holding More Debt” by Neil Shah was posted on March 21th, 2013. This article is devoted to raising debts of American people who are at the age of 65 and older and the reasons for it.

The main causes are the following. The Fed’s policy leads to falling in interest rates. As a result, pensions are decreasing, too. The largest part of borrowers consists of younger people. However, the temp of raise of senior’s debts was the highest among all age groups. One of the reasons is mortgage. Old people are becoming more likely to have a mortgage. The scale of seniors’ house owing has grown. The amount of mortgages held by old people is growing, too. However, retired people usually do not have as much money as younger ones to pay off their loans.

I think that such situation has both positive and negative sides. It can be positive, because by obtaining loans retired people can afford to buy more. For example, more seniors are likely to have mortgage. However, such situation can cause some negative issues. Retired people usually have fewer chances to earn money compared to the young ones. Therefore, sometimes they are unable to pay off all their loans.

The article “Number of the Week: Urban vs. Rural Spending” by Phil Izzo was posted on March 16th, 2013. The author discusses the differences between the rural and urban spending and the reasons for it.

In the USA, 92% of households are considered urban, and 8% of households are considered rural. Considering their spending, rural households usually spend less than urban ones. On the contrary, urban households spend more almost for all goods and services. It can be explained by the fact that demand and prices of rural areas are higher. However, rural dwellers spend more on healthcare, because most of them are at the old age. They also spend more on petrol as they drive more.

I think that such situation is natural. The urban and rural lives of many countries differ. However, they are becoming closer due to the economic development and globalization.

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