One of the stunning revelations that came out of the financial crisis was that the median household net worth fell from $126,400 in 2007 to $77,300 in 2010. What was even more interesting in the report put out by the Fed Consumer Survey was that median home equity fell from $110,000 to $75,000. Think about this for a second. Most of what Americans have in what we would consider as wealth is locked up in housing. In fact, non-housing equity wealth was $16,400 in 2007 and fell to a paltry $2,300 in 2010. Is it any wonder why so many Americans depend on Social Security deep into retirement as their main source of income? While the stock market has rallied dramatically from the lows reached in early 2009 the housing market is still far away from the peak. What is interesting is the lack of move up buyers in the current market. With such little inventory I’ve been seeing the first-time home buyers diving in simply with maximum leverage. Americans if given the chance would borrow a million dollars at zero percent (the big banks are doing this). What does the future hold for the next wave of young home buyers?An interesting article.
Thursday, February 14, 2013
The next generation of home buyers and our over investment in real estate: first time home buyers and move up buyers see their net worth crushed during the last few years.
Dr. Housing Bubble reports:
Posted by Steve Bartin at 4:30 AM