- From 2004 – 2006 Americans pulled $840 billion a year out of residential real estate; to give that number some perspective that an amount large enough to be the world’s 14th largest economy on a GDP basis.
- The housing ATM financed $310 billion/yr worth of personal consumption from 2004-06.
- A year ago, money taken out of homes was equivalent to about 9 percent of total personal income, now the number is down to around 5 percent. A 2 percent drop in consumer spending is enough to send the nation into a recession.
- In 2006 20 percent of the personal consumption spending in California and Nevada was financed by home equity loans it’s now down to 9 percent.
Monday, 12 November 2007
Living on borrowed time
Looking at the US economy today is like looking into our future. Over there, house prices are tumbling, and credit markets are seizing up. Although house prices here have yet to start correcting, it is definitely getting much harder to borrow.