Markets & Economy

The conventional wisdom on why home sales have stalled is wrong

Rising home prices and mortgage rates are not the culprit

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New data has pushed housing to the forefront of the recovery discussion. Can the economy recover without housing? What has gone wrong with it? If housing is de-emphasized as never since the Depression, what does it mean for inequality, the new darling of the Left, and the free-market pleasure of the Right? Other news, quickly: Orders for durable goods sparkled in March, the 2 percent gain doubling the forecast. U.S. manufacturing is hot. Goody. Maybe 18 percent of GDP. Would you like your college grad to work for GM making stuff, or for Google, which makes nothing? Vladimir the Stupid is in a one-man Mexican standoff. Merkel spoke for the first time in weeks, accusing Vladimir of "imposing his will with the barrel of a gun and force of a mob." Much as Germany would like to be an overlarge and changeless Switzerland, I think Vladimir has underestimated European resistance. The threat of imminent conflict creates a steady bid for U.S. Treasurys. As does deflation in Europe, a...