VERY FEW MARKETS are as complicated as the housing market, which may be why it so confuses market watchers. One week the New York Times reports “Healthy Housing Market Lifted the Economy in July,” the next week the same writer discovers, “July Slowing of Home Sales Stirs Talk of Market Peak.”

This confusion is no trivial matter, since the housing industry has replaced the auto industry as the driving force in the U.S. economy. Bureau of Labor Statistics data compiled for me by Diana Furchtgott-Roth, a colleague at the Hudson Institute, show that the housing and related industries now account for 4.8 million jobs, some 60 percent more than the once-mighty auto industry. Whereas the auto industry has desperately shed 60,000 jobs in the past 4 years so as to reduce its future pension and health care costs, points out Furchtgott-Roth, the housing industry has created almost 600,000 jobs in the construction and financial services.