SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GraceZ who wrote (48722)1/4/2006 2:04:12 PM
From: anachronist  Read Replies (1) of 110194
 
So when someone sells their previous house they are spending the proceeds on something else and borrowing 100% to buy the next one?

No, and I never made that claim. Equity appreciation is capital gains, not savings. Savings is foregone consumption. So when someone sells their house today 90% is capital gains, and 10% is savings (the amount of the principle of the loan paid back). My assertion is that most 1st time home buyers are not using savings to buy homes, and trade-up buyers are using their capital gains from their previous home to buy their next one.

So to repeat what I said before, house price inflation is not consuming savings. It is consuming people's income and ability to save, as evidenced by the net negative personal savings rate for the year 2005.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News