Total equity has increased, even if the percentage compared to overal home value has decreased, if that is the case.
I can see the impact of percentage equity decrease with a lull in the market as some increase in defaults, but primarily a reduction in cash-out financings as a source of input to the economy.
It would be interesting to see if that is significant compared with the stimulus of the oil price reduction, tax reduction, $trillion fed injection, large fed spending programs, etc. etc. I would doubt it. I think cash-out financings is under $50b, while new stimulus is getting over $100b range.
Home ownership is such a steady slow-moving asset for the average Joe, it seems to be dramatic only with high-end million-dollar homes, which fast-money can buy and dump and various prices.
I'm building some homes in a neighborhood of million-plus homes near a high-tech center, and have seem reductions. While nowhere near what I expected, at least the tradesmen are finally lowering their prices and have stopped playing hard to get. Last year I was told $160/ft for quality construction but he "didn't have time for me right now", this year, being a cheapskate, I'll be doing owner-builder at almost 1/2 that. |
