Use supply and demand economic theory and diagram to explain why the prices of houses has changed so much over the last 3 years.
I just need topics to use to write about
To explain why the prices of houses have changed over the last 3 years using supply and demand economic theory, you can explore the following topics:
1. Market Conditions: Investigate the overall conditions of the housing market over the past 3 years. Look into factors such as interest rates, economic growth, and employment rates, as they directly affect both supply and demand.
2. Supply Factors: Discuss the changes in the supply of houses during this time period. Consider factors like new housing construction, inventory levels, and housing regulations, which impact the availability of homes in the market.
3. Demand Factors: Analyze the shifts in housing demand over the past 3 years. Examine variables like population growth, changes in demographics, and shifts in consumer preferences, as these factors influence the number of buyers in the market.
4. Housing Affordability: Delve into the affordability aspect, which affects both supply and demand. Consider changes in income levels, mortgage rates, and lending practices, as they influence the purchasing power of potential homebuyers.
5. Government Policies: Discuss any government interventions or policies that have been implemented during this period, such as tax incentives for homebuyers or regulations on real estate investors. These policies can have a significant impact on housing prices.
6. External Factors: Consider any external factors that may have influenced the housing market, such as natural disasters or major economic events. These factors can disrupt supply chains, increase construction costs, or affect consumer confidence.
By analyzing these topics within the framework of supply and demand, you will be able to provide an insightful explanation of the changes in housing prices over the last 3 years. To accompany your explanation, you can use a supply and demand diagram to visually depict the shifts in supply and demand curves and how they have affected price levels in the housing market.