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Home Equity as a Percentage of Household Net Worth

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 . . .

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