It's the Economy, Stupid
Fixing the rest of the economy first is admittedly more easily said than done. But the key point is that housing will most likely follow, not lead, the rest of the economy out of a slump. "Housing prices are going to be driven by the health of the economy," says Peter Morici, professor of economics at the University of Maryland. "It's become a following indicator. ... In the past, housing was a major part of the economic expansion."
Jobs are perhaps the area of the economy most inextricably linked to the housing sector. Mark Zandi, chief economist at Moody's Analytics, says that jobs are the most significant weight on housing right now. "People can't buy a home unless they have a job or are confident that they will hold onto a job," says Zandi.