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People dont lose anything until they sell. Most people aren’t selling. So they haven’t lost. And how would you limit the effect if housing dropped for the man
by megablast 5y ago
People dont lose anything until they sell.
Most people aren’t selling. So they haven’t lost.
And how would you limit the effect if housing dropped for the many other reasons prices drop?? You don’t.
- worik 5y ago> People dont lose anything until they sell. Not quite true. It would be truer if they have no debt. But having a large debt, and negative equity, makes a family very vulnerable economically.
- dmoy 5y agoWhat percentage of pensions and 401ks are tied up in mortgage backed securities, etc?
- jdkenney 5y agoMany people would be forced to sell though if there was a price drop, because the high prices necessitated having a very high borrowing rate (95% borrowed), and commonly at renewal (typically 5 years in Canada) mortgage terms require the borrower to pay the difference between the market value and the borrowed amount to ensure they are not more than 95% leveraged still. This is the big problem the government has: it is very difficult to unwind this mess through policy without triggering a cascade. Likely it will come eventually, they just want to ensure it’s not their party in office when the shoe finally drops.