Did you manage to take a look at post #142?
The chart is meaningless, unless one knows what is in one's portfolio as a whole. The chart is also about "change," ie the delta function, rather than absolute net worth from various categories of assets, which of course accentuates modest changes in values vis a vis the delta function. I own a boat load of real estate with little leverage. The changes to date in my absolute net worth are relatively small. Cheers.
Household wealth does not increase in a straight line but it does increase. It declined from 2000-2001 and again from 2001-2002. However, the long term trend is up, up, up. Since 1981, our household net worth has increased by $31 trillion. That's more than the previous 200 years combined. We ran trade and budget deficits (twin, not triple) during that time yet our net wealth increased dramatically. Were we doomed during those years too?
There is no doubt that the increasing value of our homes helped the growth in net worth but still, our homeowner equity accounts for just 20.6% of our total household net worth. If home prices lose one, two or three percent this year vs. 2005, is it really going to have much impact on our net worth? Hardly. Because, as you're seeing now, as capital flows out of real estate it flows back into the equity markets. Witness the performance of the Dow and other indices over the past few months. We have a lot of wealth outside our homes and our household debt, as a percentage of income, has only increased by a half a percent since 1996. Our annual national debt is just 2% of GDP which is lower than the 2.7% it has averaged over the past several decades. How anyone can find doom in these facts is a mystery. Of course, I don't get my economic news from Kitco or Economyincrisis.org.