Residential investment is a big part of the economy. Curerntly, it carries the economy. It is a leading indicator of the economy, and it correlates with housing prices. The other chart shows that the homebuilder stocks are overvalued.
This leads me a second thought: does it seem right that the “greatest country in the world” is sustained by building houses? Shouldn’t we be making our mark by researching and building new medicines, alternative energy, robotics, new communications and computers? I personally find it concerning that housing leads the economy. It’s not sustainable and it is “brawn” over “brain”.
