Housing Market Stumbles, Can Economy Soar?

As the housing market stumbles, can the economy continue to rise?An unstable housing market may have plunged the U.S. economy into a tailspin, but according to Steve Goldstein at MarketWatch, the recovery may no longer be dependent on the health of the real estate market. Are we seeing, for the first time, a departure from the kind of rhetoric that defined the American Dream? Has the value of homeownership been irrevocably tarnished by the recession? Can the economy recover -- independent of home values?

The latest consumer confidence numbers seem to suggest so. But can the economy ever truly soar without a healthy housing market?

Read on to find out.
The housing market may have dragged the U.S. economy into recession. But increasingly, the U.S. economy seems to be gathering strength even as the housing market, at best, continues to limp along.

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That dichotomy was seen in the data released Tuesday: house prices falling in September (more timely but volatile data suggest the same thing), and yet U.S. consumer confidence hit the highest since June, and a Chicago-area manufacturing gauge reached its top level since April.

One can always poke holes in a single month's data, but Tuesday's releases are broadly reflective of what we have seen for a few months now.

The housing indicators are pretty glum: The pace of activity has bottomed out at a pretty depressed level following the expiration of the first-time homebuyers tax credit, and now prices seem to be headed toward a similar track. (Let's hope prices don't follow the 16% retracement from pre-credit levels that existing home sales have.)

But the manufacturing indicators have been pretty decent, ahead of Wednesday's national report. The services side doesn't look too bad either: Retail sales during the week that included Black Friday rose 0.5%, and purchasing managers have reported improving conditions for the last 14 months.

Read the full story at MarketWatch.

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