High House Prices Make World Economy Resilient

Posted by: Abhijeet Chavan
Thanks to: Abhijeet Chavan

1 April 2002 - 6:00am

Results from a house-price survey by The Economist suggests that higher higher house prices have helped shelter the U.S. economy from a deep recession.

"Why has the American economy held up better than expected?...One explanation lies in the surge in house prices, where the Fed's interest-rate cuts have certainly worked their magic...For most people, housing is by far their largest form of wealth...Recent studies show that in most countries changes in house prices have a bigger impact on consumer spending than do equity prices."

Full Story: The houses that saved the world

Source: The Economist, March 28, 2002