Even in neighborhoods that I am familiar with you have people living in million dollar homes being incredibly frugal with groceries because they cant afford to get out of line in their budgets. .
But here we are seeing cash-out refis hitting pre-crisis levels. .
Tapping equity out of your house simply prolongs your obligations and assumes the good times will go on indefinitely.
This is largely symptomatic of a bigger issue here and that is people are still cash strapped. .And of course contrary to anecdotal evidence, we have actual data on this: By doing cash-out refis you are essentially locking in the current valuation of a home and this gives you little buffer should there be a correction (of course this will never happen.So either you go into deep student debt for school or you can help finance a college education by your current resources. .The overall tone is incredibly housing positive even though there are major issues in the housing market. .A majority of people max out their lifestyle and are living on the edge when it comes to servicing their payments. .You can look at crypto-currencies, startup companies, and even housing and we are in overvalued territory.This was one of the many reasons for the last housing bubble where people believed the hyped and went into deeper debt because of this notion that a home was an ATM with a roof. .It was only a matter of time that people started using their homes as ATMs. .Housing Bubbles Blog to get updated housing commentary, analysis, and information.And this assumption is based on the underlying mentality that yes, a home is really worth that amount and now people are locking in these high price levels. .
The delusion is running deep. .For example, the homeownership rate is near generational lows and much of the household formation since the bubble burst has come in the form of rentals. .They have mega mortgages, big car leases, kids in daycare, and their monthly bill is obscene. .You have to pay that money back on your glorified crap shack. .The older buyers are living modestly and are house rich, cash poor while their new neighbors are living a life of luxury supported by higher incomes. .Taco Tuesday baby boomers. .The housing ATM is an attractive choice.Now homes are being used as ATMs. .The housing ATM is back, people are once again using their homes like ATM machines. .These are typically your.
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