On May 23, 2007, at 11:45 AM, Michael Perelman wrote:
Isn't that number rapidly increasing as the value of housing falls?
In the aggregate, the value of housing isn't falling (much) - equity is down because debt is up. The value of residential real estate owned by the household sector in the 2006Q4 flow of funds was up 1.0%, while the value of mortgage debt was up 1.6%. From 2001Q1 to 2006Q4, the value of residential real estate was up 77% and mortgage debt was up 98%. Over that period, owners' equity fell from 58% to 53% of the value of underlying real estate. Doug
