Word: ands
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Dates: during 1980-1989
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Granted, building a home or installing a pool isn't exactly "spending" the way flying to Rio is -- the home has lasting value. But neither is it a productive investment that makes the economy more efficient and competitive for the future.
Sluggish home prices are also good news in the drive to dampen inflation. Returning to the days of negligible inflation, if we eventually can do so, should also mean returning to the days of low interest rates (from 1880 to 1965, home mortgage rates above 6% were all but unheard...
So if the bull market in homes really is over, that's not all bad -- unless it gets out of hand. It's one thing to have prices trail inflation for a number of years, quite another to allow a stock-market-style 40% crash in prices. That would leave...
The banks and the Government already own an awful lot of homes -- 250,000 would be a rough estimate -- which alone is reason to expect prices to be weak. The Resolution Trust Corp., set up to sell off the holdings of hundreds of failed S&Ls, is pledged to avoid...
If prices come down and people feel poorer, consumer spending could slow a bit. Other factors may keep the economy humming, but one thing that's bound to slow is the turnover of houses. People are stubborn when it comes to selling their homes at less than they were counting...