Every day, the headlines seem to scream that the housing market is about to destroy the economy...and yes, I agree that there is a serious situation out there, with foreclosures up and more expected for quite a while.
But panic begets panic, and in the same way that the press implied a couple of days ago that the first "Boomer" to apply for Social Security was the beginning of the end of the retirement system, the newspapers and television are exaggerating the effects of Real Estate on today's economy. Today's featured news was a speech by Treasury Secretary Henry Paulson at Georgetown University. He stated that he views the housing decline to be the most significant current risk to the economy. He neglects to mention the balance of trade or the hundreds of billions spent on the war in Iraq.
We have seen declines in the housing market before, but in the long run, people need homes, and stability will return. Some homeowners will be hurt, just as stockholders were hurt in the early '90's, but lessons will be learned, too, and there will be tighter controls on lenders and their practices in the future.
No comments:
Post a Comment