Is Housing the Economic Landmine?

Dan Dorfman says the housing market may too much of a good thing:

* In the last 40 years, housing has averaged 4.5% of GDP. However, with the recent housing boom, its share has moved up sharply to 6%, the highest level since 1978. However, since 2001, that figure has shot up to 12%, and in the first half of this year, housing accounted for an astounding 50% of the overall growth in the economy.

* Since 2001, about 50% of all jobs created in the private sector, and maybe as high as almost 60%, relate directly to the housing boom. What's more, residential construction employment alone stands at 21%, and on top of that, notes Mr. Rosenberg, the average hourly wage for residential construction workers is higher than that for an average private worker, $17.38 versus $16. Therefore, he adds, the housing boom is not only boosting the payroll count, but also turbo charging aggregate personal income.

You'll want to read this one.