Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

Home Equity Rebound Could Push Spending

IRVINE, Calif. (UPI) — A rebound in home equity prices can push consumers to spend, boosting the U.S. economy, an economist at research firm CoreLogic said.

With the percentage of U.S. homes considered “underwater” falling, spending could increase and more homeowners could feel more confident taking out loans, The Wall Street Journal reported Tuesday.

A recent CoreLogic report said there were 1.7 million fewer homes considered underwater in the fourth quarter of 2012 than there were in the same period in 2011. The percentage of homes worth less than what was owed on their mortgages — the definition of underwater — fell from 25.2 percent at the end of 2011 to 21.5 percent a year later, the report said.

“Home equity is the biggest source of wealth, so if equity is increasing that has a very large effect on household spending and consumer psychology,” CoreLogic economist Sam Khater said.

Increased confidence among homeowners can also have a direct effect on the housing market, making it easier for people to move to better jobs if the chance to do so comes up.

When a home is worth less than what is owned to the bank homeowners tend to hold on, waiting for a point where they could at least break even before putting a home on the market.

More homes on the market means it is easier to move. It also means more commission checks for real estate agents.

“All the things that fed on the downside feed positively on the upside,” said Joseph LaVorgna, chief U.S. economist for Deutsche Bank.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

Facebook Conversations

Join the Discussion:
View Comments to “Home Equity Rebound Could Push Spending”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.