If the economy still feels stuck, blame the housing market.
By Neil Irwin | The New York Times
That may not match how people in a handful of big, prosperous cities see things. After a disastrous and historic crash, housing is booming in places like San Francisco and New York. Bidding wars are back, and the question is not whether the real estate market is recovering but whether new bubbles are inflating.
But there’s another reality that is more important for the national economy. Except in a few booming markets, housing is nowhere close to pulling its economic weight. Consider this:
Investment in residential property remains a smaller share of the overall economy than at any time since World War II, contributing less to growth than it did even in previous steep downturns in the early 1980s, when mortgage rates hit 20 percent, or the early 1990s, when hundreds of mortgage lenders failed.
