Five Policy Considerations for Improving Ohio’s Housing Markets
Ohio's housing markets still face a number of challenges, such as elevated foreclosure rates and a prevalence of vacant, low-value housing. This paper suggests five areas where policy interventions are worth considering.
The lowest point of the housing bust was characterized by a glut of supply. Homes for sale remained on the market longer, and foreclosed homes and those with mortgages in default added to or threatened to add to this inventory. As a result, prices fell, and construction of new homes fell to extremely low levels. While there are many encouraging signs of recovery in housing markets at the national level, there is a good amount of variation in the degree of recovery across the country.
Why Are the CPI and the PCE Giving Different Estimates of Inflation?
In January 2012, the Federal Open Market Committee announced that its long-run objective for inflation was 2 percent as measured by the Personal Consumption Expenditures price index. At the time, the PCE appeared to be moving toward this target. But since then, PCE-based measures have drifted down. Toward the end of 2011, the year-over-year change in the PCE was close to 3 percent, but by March, when the PCE fell 0.1 percent, the 12-month percent change in the index had fallen to just under 1 percent. This has prompted some FOMC participants to suggest recently that the Committee may need to act to address this disinflation.