Friday, March 7, 2008

Home Equity at Lowest Rate in Years: Foreclosures High

Americans have the lowest average equity since the Federal Reserve started keeping track in 1945. The average American now has more debt against their homes than the amount they actually owe. This is an indication that the financial well being of most Americans is not good, as real estate ownership is the #1 source of wealth. It also demonstrates our increased reliance on debt for our "needs" of life. Americans have consistently borrowed against the equity in their homes to purchase luxuries. With home appreciating decreasing, this is greatly reducing wealth, and potential retirement income for many individuals. At the same time the record number of foreclosures doesn't help this stat either as most Foreclosure filers have little or no equity.

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1 comment:

Alan Barker said...

If you think equity is bad in some places, you ought to see how bad it is for Jacksonville Florida Condos, after the housing boom condo prices went through the roof. People who bought during that time with 20% down don't even have any equity. Its actually pretty sad. Half the condos on the market are foreclosures because people didn't have enough equity to sell.