Hope for the economy

People are looking for some good news about the condition of the economy, and N.C. State University economist Mike Walden gives them some.

“We’ve had some good news — encouraging news — recently on the housing market. And the reason this is very important is, I think, most people have agreed that this recession really, really started with the dramatic downturn of the housing market. Prices went down. Equity was lost by homeowners. So we need a turnaround in that housing market, which is a very big part of the economy.

“And recently we have seen, for example, prices turn up. We’ve seen construction start to move higher. We’ve seen sales start to move higher.

“This is really important I think for two big reasons: One, on the price side. As prices go up, household wealth — the wealth that people have in their homes — will go up, and people who own homes lost trillions of dollars of wealth when prices went down. And secondly, as we get more construction, more sales, that means more employment in the housing area. And we’ve still had very, very high unemployment rates in areas like construction.

“So, this is all very good news that the housing market truly has bottomed out and started to go higher. And I think it is reason for some optimism in the economy.”