To: SouthFloridaGuy who wrote (87478 ) 8/31/2007 8:53:37 AM From: GraceZ Read Replies (2) | Respond to It's neither smart nor stupid. People took money out and put that money and a lot more back into their houses primarily because they see/saw their houses as a store of wealth, a place where they can retrieve that money later. Until recently they've been largely correct. But that wasn't my point, to confer judgement on their actions.housing has sucked up money (you'd know that if you owned a house). into housing, not out. If the flow was negative, then the stock of housing would be deteriorating. If anything that money flow into housing helped pump up the Chinese economy, not the US. Stopping the flow into housing has a lot less consequence for the US economy than most think, at least beyond those in the housing industry itself like the home builders and home improvement industry. During the last period of flat RE prices the economy boomed and incomes rose.
