Some "housing bubble" facts...

what many folks simply do not realize or, if they do, do not fully appreciate, is the extent to which the overheated real estate market has been driving the u.s. economy... besides the jobs and industries it supports, the consumer spending derived from equity appreciation and equity borrowing is massive...

case in point is my son and his wife whose home in reno appreciated 43% during their first year of ownership... half of that appreciation was borrowed against to assist in reducing the principal of student loans and paying off credit card debt... they may not be as vulnerable as some but i sense there is a huge amount of risk out there most of which lies on those least likely to be able to weather the storm should it come... here's some facts from the center for economic and policy research...

(thanks to atrios...)

The “Housing Bubble Fact Sheet” provides an overview of the housing market and its implications for the economy:

* Over 2 million housing units are being built annually, while the number of households is only growing by 1.4 million a year.

* Some regions of the U.S. have experienced a 60 percent increase in real home prices, while the average for the country as a whole is 45 percent. Historically, real home prices have not increased, as house prices have just kept pace with the overall rate of inflation.

* The collapse of the housing bubble will have a larger impact than the collapse of the stock bubble, since housing wealth is far more evenly distributed than stock wealth.

* The collapse of the housing bubble will likely throw the economy into a recession and require a federal bailout of the mortgage market. It could lead to a loss of 3.6 to 4.5 percentage points of GDP.

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