Who gains and who loses from rising houseprices?

Question

Who gains and who loses from rising houseprices?

*I understand that "Sellers gain & buyers lose." However, I need to write short sentenses or essay. How can I write it?

Please someone help me...

Answer 1

Yeah, it's probably enough for a decent sized book, if you went deep enough.  It appears to be the standard economics exam question nowadays; at least for the exam I take.

On the pros:

Homeowners gain, as they have more wealth (meaning the stock of assets).

Economy in general gains, as you get the wealth effect, in which homeowners may purchase more as they have more wealth, e.g. by taking mortgage equity withdrawals (see source).

Those related to the housing industry gain, e.g. housing contractors, furniture sellers, etc.

On the cons:

First time buyers lose out, as getting on to the housing ladder is a lot more expensive.

Everyone in a way stands to lose out, if housing prices rise too far and become overvalued, leading to the bubble burst and rapid price fall.

Possible inflation risk arising from the greater economic growth, which may be worse for those with savings.

Of course, these things are said, ceteris paribus, i.e. assuming everything else remains the same.  There's also probably a lot more parties can stand to gain or lose as a result, but this is a basic synopsis.

Answer 2

the people dont benefit at all,,,, its hard for the average american to own a house these days mortgages are through the roof and forclosure records are soaring if the seller bought the house at 150,000 and sold for 225,000 then they gain but any payments they havent made have to be paid off with that money and inflation is so high they basically sold it for what they bought it for and house sales are close to rock bottom because no one can afford them. Hopefully the economy gets better!

Answer 3

In our current economy, it's the sellers loss, buyers gain because housing prices have actually plummeted.

However, if you were trying to make the argument for sellers gain, buyers lose you'd have to go with:

When the sellers gain is the buyers loss, a seller has sold their home for more than it's worth. This is a loss for the buyer because they most likely will not be able to get the same price or more for their home when they try to sell.

Answer 4

well right now the prices are down... so we peofeit with it down... so in conclusion, sellers gain fron higher prices

Answer 5

the BANKS AND MORTAGE COMPANIES WIN! THE HOMEOWNERS LOSE DUE TO THEIR STUPIDITY!!