The impact of the housing market on the 2008 financial crisis couldn't have been more different than what we've seen during last year's recession. While housing acted as a strong headwind slowing the economic recovery 12 years ago, now it's looking like a tailwind that will help lift the economy as we move past the pandemic in 2021. The damage wrought to the sector after 2008 was multipronged and long-lasting. The glut of foreclosures and inventory overhang meant that very little new construction was needed for years. There was consequently minimal growth in construction employment -- a key driver of the business cycle -- coming out of 2008 until the latter part of 2012. That was one reason why the early years of the recovery felt like we were still stuck in a recession. The foreclosure crisis pushed homeowners into renting at the same time large numbers of young Millennial workers were also entering the rental market, squeezing renters at a time of high unemployment and low wage growth. A decade later, we've seen shifts in the housing market this year that could boost economic activity in 2021. Rising buyer demand combined with a shortage of homes for sale have led to accelerating price growth since the first quarter. At this point, a 10% year-over-year increase in home prices looks plausible for 2020. That means that home-equity levels in the U.S. might end up increasing by $3 trillion this year, a positive wealth effect with the additional benefit of record-low rates on home loans that allow homeowners to refinance or cash out equity. The shortage of housing inventories has led to a rapid recovery in construction jobs, with employment now down just 3.7% from its February 2020 peak. For comparison, it took until January 2019 to recover to a level that was 3.7% below the mid-2000's peak, a solid 10 years into the recovery. There's going to be no lost decade for the housing industry this time.