What the Media Economists are missing in my opinion.
I have listened to and read many reports on the current housing market across the United States, and the one thing that I see they’re missing is they are treating housing like a stock certificate. I understand how mortgages are sold and the secondary market, which is in shambles. The one thing that the media experts fail to see is the need for housing.
Food, Clothing and Shelter are humans’ basic needs. Stock in companies while extremely important in helping to provide the three basic needs, do not quite measure up as a need. Shelter, i.e. housing is one of those needs. I read an article on MSN over a week ago about how bad the current rise in housing sales may actually be bad for the economy in the long run.
I thought anything generating income was good for the economy. Maybe I am being overly simplistic in my thinking, but I could swear that was one of the key things in my Econ classes. The thing that caused me to have issue other than the doom and gloom tone of the entire article is that the housing bubble was directly compared to the dot com bubble of a few years ago.
While I don’t disagree that housing and the dot com bubble were helped along by investors. Housing is a need, not a want. Housing is something more than just an investment. Whether you are buying your own home or property to use as a rental, someone will need to have a place to live. Looking at the housing market solely as an investment is looking at just a portion of the market.