The Great Recession ended 5 years ago but the subsequent 5 year economic “recovery” remains less than stellar- for a larger portion of the country.
For most people, their home is their single largest asset- especially for middle and lower income families- and many of these families are still under-water (owe more than what their home is worth). What does that do for one’s psyche and desire to “spend?” Since the overwhelming majority of the population fall into this category, I like to look at both housing markets to ascertain the overall health, and direction, of the economy.
The following four charts illustrate exactly what we are seeing on Main Street (the economy). On average, upper income families are thriving while middle and lower income families continue to struggle.
In order for the economy to gain traction and begin growing at a healthy rate- I’d like to see the entire housing market (not just the luxury market) improve markedly. All things being equal, that is the one missing link for the economy to kick back into gear and thrive again.
Note: HOV was chosen to illustrate the Middle/Lower income housing while TOL illustrates the luxury home market.