As that chart above shows, Housing as a percentage of Household net worth fell during the giant Bull market in equities from 1982 to 2000. The 2001-07 ramp up was artificially goosed by ultra low rates.
Two other factors to keep in mind when discussing the wealth effect:
1) The vast majority of Americans have very little money tied up in equities. The median family’s portfolio is worth well under $50k
2) The biggest investment remains real estate, with a median value of $200k. At 20% down, it still reflects 10 to 1 leverage.
Hence, why nationally, the wealth effects of real estate are far more than stocks . . .
Join us on our
Share this page with your friends
on your favorite social network: