Serving Bellingham & Whatcom County
Coldwell Banker Bain
Tom DeRose :: Wireless: 360-220-9355 :: Email: tderose@coldwellbankerma.com
Housing Crash and Recovery: Part 10
Posted on December 2, 2011
Implications of a Housing Rebound
(this is the final entry for this topic)
If the housing market does begin to recover, what could it mean for the U.S. economy? A lot!
On average, over the last 50 years, home building has accounted for 4.5% of U.S. GDP. In the second quarter of 2011, it accounted for merely 2.2%.
A rebound in home prices would have a dramatic impact on household net worth. Housing is a leveraged investment
Rising home prices should also help lending in the economy in general--they would lead to reduced foreclosures and the reserves banks need to hold against potentially bad loans.
Perhaps most important would be the general effect on confidence of a rebound in U.S. housing. When housing recovers, it should improve the public mood, spurring more spending, more hiring, and more investing.
While housing has always been central to improving family fortunes, today, more than ever before, it is central to the recovery of the nation's fortunes.
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