While housing has at times pushed the economy into recession it has historically pulled it out as well, as was the case in 1981, 1990 and 2001. Today, it appears that housing is indeed pulling the economy out of the proverbial ditch, but its grip is sweaty and the weight of the economy is immense.

Micro-markets and other economic indicators are showing signs of a recovering economy, but the housing supply, limited access to credit and fear of home price declines and increasing regulatory burden appear to be holding the housing market back from a more meaningful recovery.  

Notably housing has been conspicuously absent from presidential campaigning, but the social, emotional, health, and financial values of homeownership are well-understood and documented.  These values offer a compelling justification for their inclusion alongside debates over the economy and healthcare.

For example, The New England Journal of Medicine’s Neighborhoods, Obesity and Diabetes study showed that housing and improving neighborhood conditions positively affected individual health and family relationships.  A survey conducted by the Woodrow Wilson Center found that Americans rated homeownership as 10 out of 10 for personal importance, and a Coldwell Banker survey found that 78 percent of Americans cited homeownership as one life’s greatest achievements. Homeownership also helps families build wealth through price appreciation and equity accumulation.

A study by Homewise found that a family purchasing a $200,000 home with a 30-year fixed-rate mortgage would amass over $40,000 in savings in the first ten years or the equivalent of depositing $374 into a savings account every month for those ten years. Moreover, the Greenlining Institute shows that historically 31 percent of American household wealth is maintained in home equity.

If the two construction indices – the U.S. Census Bureau’s New Residential Sales and Construction Price Indexes and the National Association of Realtors’ Existing Home Sales Report – do not show improvement this week it is likely due to six-month housing supplies, limited access to credit and fear of further home price declines and increasing regulatory burden.

But gradually these indices, and other macro-economic metrics, have begun to show signs of a recovery.  Housing starts are up 20 percent year-over-year. After months of record-lows, mortgage interest rates have increased for three weeks straight. Just last week privately-owned housing unit building permits increased 6.8 percent over June.

Presidential candidates, policymakers and legislators alike must keep a close eye on these indices especially if they do not continue to show improvement – remembering that what is good for the housing market is good for the homeowner and that strength in the housing market reflects and ultimately drives macro economic growth.