Posted on 02/01/2006 6:04:26 AM PST by AZRepublican
National average. Two years ago. Would have to look up the source.
I didn't see how they estimated savings in the article. Is it only the residual of earnings minus consumption?
Long term, yes.
Short term? After the ARM loans bust I wouldn't want to be a seller for a while.
If those people hadn't been paying for their homes, they'd have been throwing their money at landlords.
Perhaps renting, rather than buying, is a good idea in some areas at some times. But usually it's not a good way to use money.
In the coming era of Islamic nuclear terrorism, all of that is about to change.
Yes. Homeowners usually have some equity in their homes.
At least they haven't been turning their paychecks over to their landlords.
You are correct. They are not taking into account these types of savings accounts. Consequently, their entire argument is bogus. My wife & I have $600,000 in a 401k. We do have an emergency "savings" account, but we pour all we can into the 401k. It's a great investment because of the tax savings, employer match, etc. Whoever keeps writing articles like this is living in the 50's.
Owner with $5000?Renter with $5000?Owner with $5000?Renter with $5000?
"dipped into previous savings in 2005 - to the tune of one half of one percent of their after-tax income"
um aftertax income apparently does not include pretax items like 401Ks etc. so Americans could be saving more just not in completely liquid assets
i'm in a small town, in central MI, watching my house appreciate at 8% every 6 months.
Incredible... a new "law" of thermodynamics has been discovered that will free one's soul.
Yes
Did they feel that way about car loans back then? Did everyone buy cars without a loan? A lot of people wisely buy a car with home equity loan rather than a car loan since it is tax deductable.
Of course the best action is to only buy a car you can afford to pay cash for, but I would not count everyone who uses a car loan or home equity loan to buy a car to be a bad money manager, especially if they did it to avoid drawing down their large Roth IRA.
It is the most useless and misleading of the statistics put out by the government.
"Whoever keeps writing articles like this is living in the 50's."
Thank you, so true.
We're on the same page -- there's a lot of equity built up in houses -- but my point is that there won't be any new equity being built up.
And as far as a source of funds to supplement "real" savings, I'd bet that the people who take out equity loans to finance their lifestyles are not only already maxed-out but will soon find out that that game is over, and the people who don't take out equity loans aren't going to start.
Keep in mind that if you put down 20% on your house, you can consider that your "investment", and housing prices going up X% means that your investment is actually up 5X%. You can adjust that for rental price vs. owning price, which used to be pretty comparable, cost of an equity loan, etc.
But yeah 17% rises on the house price itself is done for a long time. (I myself anticipate that April 2006 will show the first year-over-year declines in the National Median Existing Home Price published by the NAR -- which will wreck their chant that national housing prices have never gone down on a yearly basis. National Median New Home Prices were YOY negative this past month BTW.)
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