Macroeconomics Paper

With the decline on the disposable income of both household in the economy, domestic consumption started to deterio pass judgment creating a shun impact on various industries including the lodging industry. It was set based engineer the data collected by the Bureau of Labor and Statistics that the compound yearbook judge of the house industrys CPI for February 2008 was equal to 2.8 percent, with November 2007 exhibited the highest changes from its prior month equal to 0.4 percent, as compared to the 4.2 percent of February 2007.This only means that the regulate of increase in the prices of admit units starts to slow shine but unsounded remains high considering the disposable income every household currently have. Furthermore, recitation rate plunges downwards along side with the lodging grocery store as August 2007 recorded the highest lay-off on the history of living accommodations mart homogeneous to 21,000 as compared to only 1,000 lay-offs happened last August 20 06. With this large number of workers laid-off from their jobs, plus the increasing number of bankrupt lodgement companies, employment rate started to decline.Though the GDP of United States remains high despite of the fermentation in the housing market, but its GDP growth rate importantly decline from 2006 to 2007 from 2.6 percent to 1.5 percent respectively. This only means that housing market still imposes barrier towards the economic growth of United States. Housing starts was down by 28.4 percent from 2006 to 2007 as consumers cuts their demand on housing units referable to limited budget and high cost. In order to prevent the express depression of the housing market, federal government continued slashing down their interest rate to guide housing companies to recover financially since housing gross sales has been declining since 2006.Last January 2008, the Federal Re process cut the interest rate to 3.5 percent in order to stabilize the economy and prevent the obstructiv e economic recession (Presse, 2008). Furthermore, it was also identified that new home sales declined by around 46 and 30 percent on 2006 and 2007 respectively. The say record was the lowest annual home sales since 1995. The above identified economic factors help most of the economists and market analysts in determining the next performance of the housing market as well as of other industries in the economy.In this regard, the aim of this paper is to identify various macroeconomic factors that affect the performance of the housing market and how it affects the behavior of the entire housing market. Furthermore, discussions on the future condition of housing market will be presented in order to easily understand how economists and market analysts projects the performance of housing market. Expect also at the end of this paper alternatives that would address macroeconomic factors that negatively affects the stability of the housing market and its evaluation that will serve as the g uide in choosing the appropriate solution for the instability of the housing market.ConclusionBased from the given data, arguments and examples above, it is therefore clear that housing market is indeed performing inefficiently due to various macroeconomic factors. Depletion of consumers disposable income made significant negative effects to various macroeconomic factors that later on serves as the source of instability of many industries in the economy including the housing market.Furthermore, the projections of most economists and market analysts regarding the future condition of the housing market greatly affects how financial institutions establishes their lending transactions with the housing companies which adds up to the financial problems of the latter. With the aid of fiscal and monetary policies of the federal government, the issues concerning the instability of the housing market are solved.ReferencesPresse, A. F. (2008). Fed Slashes US Interest Rates to 3.5%. Retrieved A pril 3, 2008