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Politics : View from the Center and Left

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To: TimF who wrote (51636)	3/4/2008 3:31:27 PM
From: neolib	Read Replies (1) of 543207

The average house is bigger and generally nicer, You mean the average new house. I agree. But to claim that somehow this is sufficient to account for increased private debt is laughable. Just off the top of my head, new home construction (san's bubble blip) has been running at about 1.2m/yr. So for the last two decades, that is about 24M homes. What fraction of those are bigger and nicer I don't know (quite a few of them are on smaller lots than of yore, and I don't know if or how many of them are manufactured homes, which will go to zero value rather quicker than many old houses), but lets say 50%. Your 12 Million new somewhat nicer homes does not justify a doubling in debt/income ratio of middle class America over that time. its a separate fact not a refutation of the original claim. It does point out which factor is more significant. A larger fraction of your mortgage debt has gone to real estate inflation than it has to getting you a nicer house. That is the bottom line. Americans have greatly increased debt to show for getting there. No magic.

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