InvestmentNews shows that home equity as a percentage of value has steadily declined since World War II.
I do not believe this is a problem as long as people aren't over-paying for homes. However, the problem this decade has been that people were buying homes for more than their intrinsic value. Financial leverage can magnify your gains if you buy at sensible prices, but it can also magnify your losses when you pay too much for real estate.
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Saturday, June 28, 2008
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