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Housing market is the backbone of our economy?

The part-time talk show host of WTKK in Boston said housing market is the backbone of our economy. He is a rea estate attorney. Apart from housing market, I find health care industry is also the backbone of our economy. Unfortunately this is the reason why we have a financial meltdown today.

Public Comments

1. I will be clear here and give my opinion for the first time regarding the World Financial Problem nowadays! i believe deep inside,its a big game played by the US to take over the world! through making all the world with deep financial troubles, so that it controls the world for the coming few Centuries, Next Generations will be taking this game in History classes in the future!
2. Are you asking a question? or are you ranting? Housing represents the backbone of our economy in several ways: 1. It is the single biggest part of most families' budgets. It varies from place to place, but in the San Francisco Bay area, even the Labor Department figures that housing cost, on average 45% of a family's income. Nationwide, the Labor Dept figures that housing (including utilities such as heat, water, sewage, etc.) cost most families around 42% of their income. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/24/BUV7V5R6V.DTL&hw=cpi&sn=001&sc=1000 Note that this applies to renters as well as owners. 2. The equity in homes is the largest chunk of personal assets for most people: for about 1/3 of homeowners, it is "all or most" of their assets, for another 1/3 it is "about half" their assets. Anything that changes the value of their homes will dramatically affect how they feel about their personal financial status. 3. Aside from the cost of housing itself, the housing market is important for its piggy-back effect. When people move into new homes, they tend to buy new furniture and new appliances, etc. so the housing market is even ore important to the economy as a whole than its percentage of the GDP might suggest. 4. Last, and perhaps trickiest, is that the economy seems to be driven by the margin rather than the mean or median. People take the steady state for granted and pay more attention to the changes (this is clearly true in theoretical micro-economics, but is not so clear in macro-economics in general). This suggests that even if the housing market weren't so large, its spectacular rise over the past decade, followed by its sudden drop have impacted the economy greatly. Health care is a far smaller part of the economy, though it is rising fast. For most families, health care still represents less than 10% of their expenses. With contributions from employers and the state and federal governments, the total amount is somewhat higher, about 16% of GDP http://www.kaiseredu.org/topics_im.asp?imID=1&parentID=61&id=358 Also, while health care costs are rising steadily, there have been no big surprises, which the economy hates.