As housing goes, so goes the economy

The fate of housing, and the economy, will be determined by whether falling prices can stimulate sales faster than they are causing foreclosures.

Since it bulks so large because of its direct and indirect effects, as housing goes, so usually goes the economy. And the way housing is going nowadays does not bode well for the nascent recovery.

The issues confronting housing are well known by now. They include humongous supplies, soaring joblessness, fearful families, devastated balance sheets -- and falling prices.

The last item is the silver lining in an otherwise darkened sky. Because median home prices have fallen more than 30% from their 2006 peaks, the average home is more affordable today than it has been since the halcyon days of the mid-1980s. (more)