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In the US around 65% of households own their home. A collapse of the housing market would be catastrophic for their finances. I'm sure this is true of other cou
by jeffreyrogers 9y ago
In the US around 65% of households own their home. A collapse of the housing market would be catastrophic for their finances. I'm sure this is true of other countries as well.
You might argue that many people don't actually own their home since they still have a large mortgage, but this just makes the situation worse: now you have a mortgage that's more than your house is worth.
- hanoz 9y agoIt wouldn't make any difference to those who own their homes outright, unless they were planning on trading up, in which case is it would be a positive, or down, a negative. Those who overleveraged could indeed find themselves in difficulty, however I fully expect they will get bailed out by the very people they priced out of the market by overbidding.
- jeffreyrogers 9y agoWell, if they were planning on trading up, now the home they were going to sell to purchase a new home is worth less too, so it comes out in the wash. In either case, it makes their net worth look worse on paper.