By all accounts, the news coming from the Case-Shiller home price index is good news; an average increase of 10.9% is nothing to scoff about (http://bit.ly/6Ivqgq). Granted, this is an average--areas like San Francisco experienced explosive growth, up 22.2% which led to some skewing of the numbers, but it's irrefutable that the signs all point to steady growth in the housing market. This isn't just good news for the housing market as historically a robust housing market has led to broader economic recovery, not vice versa.
In each of our three previous recessions (1980, 1991 and 2001), economic recovery was prefaced by significant growth in residential housing, growing at an average rate of 30% in the initial years of recovery.
But why is this sector so important?