How housing affects car sales
Kai Ryssdal: Figuring cause and effect in a beast as complicated as the American economy can be a tricky business. That said, sales figures out from car makers today do give us a chance to take a peek under the hood, if you will. GM’s sales rose 10 percent last month. Ford: 13 percent. Chrysler had its best August since 2007.
Driving things was a economic concoction of pent-up-demand — better supplies, easier credit. And as Adriene Hill explains from the Marketplace desk of go figure, glimmers of hope in the housing market.
Adriene Hill: For years we’ve blamed the housing market for every-which-woe in our economy. Well today, it might deserve a small pat on the back.
Jesse Toprak: Housing starts are up about 21 percent compared to last year at this time, and guess what, new car sales are also up nearly as much.
Jesse Toprak is with Truecar.com.
Toprak: A lot of times the spark in the housing market gives signals to small businesses and construction businesses to go buy new trucks.
And, right on cue, pickup truck sales were up in August.
But don’t go writing a thank you note to the housing market just yet. It’s done some, sure, but most of the credit for improved auto sales numbers goes rightfully to the other factors Kai mentioned: demand, supply and credit access. And, not to sound ungrateful, but the housing sector could do more.
Lacey Plache is chief economist at Edmunds.com. She says as home prices tick up, home owners feel wealthier.
Lacey Plache: And this increase in confidence leads people to feel better about their personal situation and to go out and buy.
But, Plache says, we’re going to need to wait on that bounce.
Plache: The slight upturn that we’re seeing probably isn’t going to make anyone feel like they are going to need to start spending in any significant way.
The other difference housing can make — homeowners using their houses as a piggy bank to buy that new car. But let’s not get ahead of ourselves.
I’m Adriene Hill for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
