We talked yesterday about housing. We discussed how it is bottoming, how it is poised—at some point—to start a recovery, and how that is a very good thing for the economy. It’s good for several reasons—largely because of the employment the sector generates and the multiplier effects it has on other areas of the economy.
Housing can be considered a durable good. Because it is a long-term asset that is purchased with financing, it reflects, to some extent, the buyer’s vision of the future. The stabilization and incipient improvement of this sector is also a sign that the U.S. population has started to recover psychologically from the crisis, which is an underappreciated element of what has to happen before recovery really kicks in.
