As we watch the real estate market pull back slightly in the United States it appears that the equity level averages are at an all time low. Where as we are coming off an all time high of home ownership the contrast is a little troubling. Home ownership is good because it means we have buy in from the masses. Unfortunately, in this case presently these people do not actually own much of anything other than a mortgage.
You see if the average equity of homeowners is now under 25% many people are at a negative equity - upside down in their homes. So they do not in that case own their home, the bank does and they only owe debt or if you really think of it one of the walls of that house itself or maybe one of the rooms you see?
Too many Americans have taken short cuts to their dream and thus their dream is a mirage, which can easily disappear over night. Folks who are over extended and find their loan cash pay off is $400,000 but their home is worth $285,000 to $325,000 due to a down turn in the real estate market might simply walk away.
What is the answer for people? Well, do not live beyond your means and be wise to live in a Humble Dwelling with little or no debt rather than trying to keep up with the Jones' who are going to bury them selves. After all if everyone is jumping off the bridge would you also jump? Consider this abstractly and consider modifying your future choices based on practicality and sensibility. Something to contemplate in 2008.