Buffett says industries tied to housing will buoy U.S. economy: VIDEO

October 24, 2012 05:30PM

With so much uncertainty in the global economic markets, positive signs in residential housing – especially in the U.S. – may point to brighter times to come, billionaire Warren Buffett told CNBC. The recovery of industries that directly benefit from a strong housing market, such as carpet and brick manufacturers, will also help to push the U.S. economy forward, he said.

Buffet cited a 10 percent to 15 percent increase in sales at Clayton Homes, his manufactured housing firm, and noted that the median price had also gone up slightly.

“This [sales increase] comes from all over the country. You name it. So that’s changed,” Buffett said. “We’re going to make a lot more money on carpet this year than we made last year, and we hire people when that happens. So the U.S. economy is not tanking.”

Although the U.S. economy is still “inching” along, it has the “steadiest trajectory” of any economy, he said. Buffett also reiterated his belief that unemployment will not decrease until the housing market improves – the inverse of the oft-cited adage that housing will not strengthen until more people have jobs. Buffett argued that demand for housing comes first, because a business cannot hire until it sees demand. [CNBC]Christopher Cameron