felixthecat
August 3rd, 2008, 08:04 PM
Housing Crisis Likely to Wipe Out
Two Decades of Family-Earned Wealth
August 03, 2008
The collapse of the housing bubble is likely to eliminate most, if not all, of the gains that families had made in accumulating wealth over the last two decades, according to a new study from the Center for Economic Policy & Research in Washington, DC.
In the report, entitled The Impact of the Housing Crash on Family Wealth [pdf file],
http://www.cepr.net/documents/publications/wealth_2008_07.pdf
the authors project that the sharpest falloffs are projected to occur for the youngest families.
(The youngest families can recoop it.)
If housing prices fall another 10%, as they seem likely to do, the study estimates that families will have a net worth anywhere from 56% to 67% less than they had in 2004. That corresponds to an average decline of $41,000 in median wealth and show, according to the authors, that homeownership is not always an effective way to generate and accumulate wealth. Go figure.
However, a study conducted in early 2005 by none other than the National Association of Realtors showed that
over two-thirds of all first time home buyers at the time had put down less than 10% to purchase their homes,
and a whopping 42% of those first-time buyers had put down nothing at all.
It's no wonder, since their own data show nobody could afford to buy a house in the first place:
Get a load of this graph:
http://seekingalpha.com/article/88767-housing-crisis-likely-to-wipe-out-two-decades-of-family-earned-wealth
Only buy what you can afford!
42% - NO MONEY DOWN!
2/3 put LESS than 10% down on the house
Two Decades of Family-Earned Wealth
August 03, 2008
The collapse of the housing bubble is likely to eliminate most, if not all, of the gains that families had made in accumulating wealth over the last two decades, according to a new study from the Center for Economic Policy & Research in Washington, DC.
In the report, entitled The Impact of the Housing Crash on Family Wealth [pdf file],
http://www.cepr.net/documents/publications/wealth_2008_07.pdf
the authors project that the sharpest falloffs are projected to occur for the youngest families.
(The youngest families can recoop it.)
If housing prices fall another 10%, as they seem likely to do, the study estimates that families will have a net worth anywhere from 56% to 67% less than they had in 2004. That corresponds to an average decline of $41,000 in median wealth and show, according to the authors, that homeownership is not always an effective way to generate and accumulate wealth. Go figure.
However, a study conducted in early 2005 by none other than the National Association of Realtors showed that
over two-thirds of all first time home buyers at the time had put down less than 10% to purchase their homes,
and a whopping 42% of those first-time buyers had put down nothing at all.
It's no wonder, since their own data show nobody could afford to buy a house in the first place:
Get a load of this graph:
http://seekingalpha.com/article/88767-housing-crisis-likely-to-wipe-out-two-decades-of-family-earned-wealth
Only buy what you can afford!
42% - NO MONEY DOWN!
2/3 put LESS than 10% down on the house