Still Not Many Takers For The Bubble Theory

Spending on home improvement has been a saving grace for the U.S. economy during the past several years. People who would otherwise be tightfisted have spent freely on their homes in the conviction that they weren’t really “spending” at all: They were “investing” in their most valuable asset. The steady rise in house prices has made this thinking fully plausible—so plausible, indeed, that it might even be correct! At the same time, the rise in the value of people’s homes has made them feel less urgency about putting money into savings, which in turn has freed up cash for all sorts of consumer spending.