An eminent construction boom could be just what our beleaguered economy needs, Matthew Yglesias reported at Slate.com.
As the ratio of homes to people grows nationally, the construction sector is almost certain to recover, an economic correspondent for the magazine. But the federal government must handle the siutation correctly, and allow rents to rise as construction bolsters the labor market more generally, resulting in a larger economic recovery, Yglesias said.
Of course, “the other possibility is that the Fed strangles the recovery and we undergo a structural shift in the organization of American society to become more like Italy, where it’s normal for adult children to live with their parents for many years,” he pointed out.
But even in the event of recovery, housing prices probably won’t go up, he said, except in the “overregulated” coastal housing markets. [Slate]