“Additionally, housing may no longer be viewed as the secure investment it once was thought to be, given uncertainty about future home prices and the economy more generally.”
Bernanke: “Housing Markets in Transition”
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Housing will remain a drag on the economy for the foreseeable future. The substantial positive multiplier effects that the sector used to provide to the economy are greatly diminished. At best, the economy will continue to muddle along. At worst, it’s dangerously probable that an exogenous shock will tip the economy back into recession.
