You are right to counsel against excessive optimism concerning the slowdown in the fall of American house prices (“Home Discomforts,” July 4, 2009). In particular, it is way too early to expect that consumer spending will rise any time soon on account of the so-called housing price effect. As you explain the effect, “rising house prices make people wealthier, increasing the amount they have to spend over their lifetimes,” which is why “they will disburse some of it in the present, because they like to spread their spending roughly evenly over the course of their lives.” Fair enough. But, as your own wording shows clearly enough, house prices need to be rising for a long while for this effect to come into play. Indeed, the rise needs to be so drawn out and steady that a large number of people could start believing that house prices are not likely to fall over their lifetimes. In the wake of the current economic crisis, such naïve beliefs will need years to sprout and take hold of the popular psyche once again, if they ever will. In the meanwhile, the housing wealth effect is only a bittersweet reminder of how good the American consumers had it until only a year or so ago.