Fall In The Rate Of Home Equity

By Petra Amelia on November 28th, 2007

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As Marshall Whittey’s wedding day came near he observed that his home is worth far less than it was a year ago, and his equity has faded away and he cannot borrow against the equity. Mr. Whittey said “It used to be that if I wanted it, I’d just go and buy it and finance it, I am feeling the crunch, and my spending is down significantly.” Dave Simonsen, a senior vice president for NAI Alliance, an industrial real estate firm in Reno said “Everybody was basically using their house as an A.T.M. machine, now they are upside down on their house without that piggy bank to go back to.” according to Mark Zandi, chief economist at Moody’s Economy.com, This summer, the size of withdrawals fell even more sharply to about one-third below the level of late last year, he said “This slide in equity withdrawal is very recent, so you wouldn’t expect the drop in spending to occur until now, or Christmas.”

Read: nytimes.com

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