Replies to post #81780 on Zeev's Turnips Patch-No Politics (ZEEV)

[Ace Hanlon]

Misoft:

I agree with what you say, but I think you may have missed the crucial point. To wit: Consumer debt service ratios are only "reasonable" because of the extraordinarily and unsustainably low level of interest rates prevailing now.

Consumer debt burdens are so high that even a modest rise in rates would greatly hike consumer debt repayment burdens with resultant heavy downward pressure on the economy.

This is an entirely new experience for the US economy and financial system.

[Larry Brubaker]

Just because some consumers take cash out when they refinance doesn't necessarily mean "the average" consumer does. I've refinanced probably 4 times in the last 7 years, and have never taken a penny of equity out of the house. Some of the 45% who do take cash out may use the money for home improvements, which could put that cash right back into the equity of their home. Others who take cash out may only take a little out relative to their equity.

I'd like to see statistics showing the historical debt/equity ratio for homeowners. Anybody know whether such a statistic is available?