Housing Rises in Terror's Wake

When the Twin Towers fell on Sept. 11, 2001, a glowing symbol of American capitalism was destroyed. Just a few months later, Americans were already talking about a new symbol of the nation's mighty wealth potential: the U.S. housing boom.

But could there have been a U.S. housing boom without the events of 9/11? It's a matter of much debate. What is clear is that certain factors that would lead to a real estate recovery were already in place before the attacks, most prominently the Nasdaq's plunge earlier that year.

Perhaps it's best, then, to say that without 9/11, there would have been a recovery in the housing market, which was in a funk in 2000 and the first half of 2001. But the terror attacks unleashed a series of policy actions that instead spurred a boom.

Most experts agree that the U.S. housing boom was caused by a confluence of factors set in motion in 2001 -- including very low mortgage rates and a newfound desire for tangible assets like real estate.

"In terms of the nationwide housing market boom, certainly the interest rate declines helped," says Lawrence Yun, an economist with the National Association of Realtors. "But there is also some element that is hard to quantify. In more uncertain times, people prefer having a tangible asset."

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