Why are high housing prices good for the economy?

[KamFongasChinHo]

Maybe this has been covered, or maybe someone can provide a good link or analysis, but why are high housing prices good for an economy? High prices for oil, food, clothing, gas, etc. are all bad, so why is it good to have homes so expensive? I understand that falling housing prices are bad if people didn’t put enough money down the banks are hurt and may constrict future lending which could hamper the economy. But it’s a zero sum game, if housing prices are lower people have more money to spend on other non-essential goods such as tvs, computers, luxury cars which keep people employed and the economy moving. Does inflated home wealth make people feel richer and thus spend more money (even though they may not have that much because they have a higher house payment).

I say lower the conforming loan amount and stop bailing stupid people and institutions out and let housing prices drop and we’ll all benefit in the long run.

[XBoxBoy]

I can’t think of any reasons why high housing prices are good for the economy, but I can think of a major reason why high housing prices are good for politicians. When prices are high people who own houses feel wealthy and prosperous, and people who feel wealthy and prosperous are likely to vote to keep the politicians in office.

Likewise all the bailouts are not really motivated by economics, but by wanting people to vote to keep the politicians in office.

Keep in mind that most politicians are fairly illiterate when it comes to economics, but pretty sharp when it comes to playing the politics game.

XBoxBoy

[XBoxBoy]

I can’t think of any reasons why high housing prices are good for the economy, but I can think of a major reason why high housing prices are good for politicians. When prices are high people who own houses feel wealthy and prosperous, and people who feel wealthy and prosperous are likely to vote to keep the politicians in office.

Likewise all the bailouts are not really motivated by economics, but by wanting people to vote to keep the politicians in office.

Keep in mind that most politicians are fairly illiterate when it comes to economics, but pretty sharp when it comes to playing the politics game.

XBoxBoy

[XBoxBoy]

I can’t think of any reasons why high housing prices are good for the economy, but I can think of a major reason why high housing prices are good for politicians. When prices are high people who own houses feel wealthy and prosperous, and people who feel wealthy and prosperous are likely to vote to keep the politicians in office.

Likewise all the bailouts are not really motivated by economics, but by wanting people to vote to keep the politicians in office.

Keep in mind that most politicians are fairly illiterate when it comes to economics, but pretty sharp when it comes to playing the politics game.

XBoxBoy

[XBoxBoy]

I can’t think of any reasons why high housing prices are good for the economy, but I can think of a major reason why high housing prices are good for politicians. When prices are high people who own houses feel wealthy and prosperous, and people who feel wealthy and prosperous are likely to vote to keep the politicians in office.

Likewise all the bailouts are not really motivated by economics, but by wanting people to vote to keep the politicians in office.

Keep in mind that most politicians are fairly illiterate when it comes to economics, but pretty sharp when it comes to playing the politics game.

XBoxBoy

[XBoxBoy]

I can’t think of any reasons why high housing prices are good for the economy, but I can think of a major reason why high housing prices are good for politicians. When prices are high people who own houses feel wealthy and prosperous, and people who feel wealthy and prosperous are likely to vote to keep the politicians in office.

Likewise all the bailouts are not really motivated by economics, but by wanting people to vote to keep the politicians in office.

Keep in mind that most politicians are fairly illiterate when it comes to economics, but pretty sharp when it comes to playing the politics game.

XBoxBoy

[Author]

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