Housing

Home Prices Are Back To Normal; Mortgage Debt's Still High

Here's a graph from Calculated Risk, based on new numbers the Fed released today:

Here's the story the graph tells: Americans borrowed trillions of dollars to buy houses during the boom. The value of the houses has plummeted, but mortgage debt has only gone down a little.

Not surprising — the size of a mortgage doesn't rise or fall with the value of a house — but still worth noting.

This is why nearly a quarter of mortgage borrowers are underwater and nearly a third of existing home sales are foreclosures or short sales. It's why the housing bust is still dragging out after five years. And it's why some economists are suddenly talking about the upside of inflation.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.