most people will continue to pay off their mortgages even when their home prices go lower. their monthly payments don't change if they've got a fixed mortgage which the vast majority have. ARM's and interest only's are still minority but seem to be clumped in certain geography like florida, the midwest, Nevada.
if those communities lose value, then what happens.. new people come in and buy those homes cheaper and the process recycles. you see, not all americans are homeowners. there are millions who'd rather own but still rent.
i fail to see how falling real estate prices will cause an economic catastrophe. in the late 80's, single home prices fell anywhere from 10%-40%. i don't recall people dumping their homes en masse to go rent or live in a trailer park.
remember the tech bubble? the nasdaq went from 5000 to 1250, losing much of it's value. yet, america experienced one of the shortest recessions in history during that period.
if those communities lose value, then what happens.. new people come in and buy those homes cheaper and the process recycles. you see, not all americans are homeowners. there are millions who'd rather own but still rent.
i fail to see how falling real estate prices will cause an economic catastrophe. in the late 80's, single home prices fell anywhere from 10%-40%. i don't recall people dumping their homes en masse to go rent or live in a trailer park.
remember the tech bubble? the nasdaq went from 5000 to 1250, losing much of it's value. yet, america experienced one of the shortest recessions in history during that period.
