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A comment on The Era of Very Low Inflation and Interest Rates May Be Near an End. Parent comment

Re:The Era of Very Low Inflation and Interest Rates May Be N... by jeffreyrogers on Thursday April 26, 2018 @04:44PM (#16935563)
In the US around 65% of households own their home. A collapse of the housing market would be catastrophic for their finances. I'm sure this is true of other countries as well.

You might argue that many people don't actually own their home since they still have a large mortgage, but this just makes the situation worse: now you have a mortgage that's more than your house is worth.

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Re:The Era of Very Low Inflation and Interest Rates May Be N... by hanoz on Thursday April 26, 2018 @05:05PM (#16935779)
It wouldn't make any difference to those who own their homes outright, unless they were planning on trading up, in which case is it would be a positive, or down, a negative. Those who overleveraged could indeed find themselves in difficulty, however I fully expect they will get bailed out by the very people they priced out of the market by overbidding.
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Re:The Era of Very Low Inflation and Interest Rates May Be N... by jeffreyrogers on Friday April 27, 2018 @10:41AM (#16941088)
Well, if they were planning on trading up, now the home they were going to sell to purchase a new home is worth less too, so it comes out in the wash. In either case, it makes their net worth look worse on paper.
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