Is housing really leading an economic turnaround?
The housing industry has taken more than its share of the blame for causing the country’s recession.
Home prices rose too high too quickly, critics say. Homeowners, then, thought they were richer than they actually were. When housing prices crashed, so did the “wealth” of a lot of U.S. homeowners.
Problem is, all of this is true. It’s hard to defend an industry from a swell of criticism when that criticism is largely deserved. (To be fair, though, there are a lot of others to blame for the economic mess our country finds itself in now. It didn’t help that Pres. George Bush started an unnecessary war in Iran or that the media ignored the signs of an impending housing crash or that politicians did not act until it was far too late or that mortgage loan officers passed out mortgage money to anyone with a pulse.)
It’s kind of nice now to see that the housing industry is actually being credited with helping to start what might be a steady economic turnaround.
ABC News recently wrote that the surge in the stock market on Monday was caused in large part from unexpectedly good news from the U.S. housing industry.
Yes, that’s right, good news from the housing industry.
Here’s some of that good news that cheered traders so: Pending home sales are up 3.2 percent, according to the National Association of Realtors. At the same time, construction spending rose by 0.3 percent last month, ABC News reported.
Spurred by this good news, the Dow Jones gained 214 points and the NASDAQ enjoyed an uptick of 44 points. Thanks to this surge, the Dow Jones is now up nearly 29 percent from its low point in March, the story said.
I have just one fear now: Scour the Internet and you’ll find loads of stories touting this as the possible beginning of our country’s economic turnaround. (The word “possible” is important here, though I think many eager readers may skip over it in their enthusiasm.) I hope that the media don’t hype this smattering of good news. If they do, if home sales should fall next month, it’ll just lead to an even greater round of despair.
And despair is one thing we don’t need more of.
