As housing values increase, Americans tend to save less. This is evidenced by the sharp drop in personal savings rates [RisMedia]. Now the personal savings rate is negative. [Reuters] In other words, we are spending more than we make.

“Many older workers, rather than building ‘nest eggs’ and paying down debt, are saving little and taking on adjustable-rate debt programmed to rise with interest rates, Kevin Lansing, senior economist at the San Francisco Fed, said in an economic letter.”


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One Response to “Higher Home Values Mean Less In The Bank”

  1. pcampbell says:
    November 15, 2005 at 12:06 pm

    It doesn’t help that Congress enacted bills +- 10 years ago allowing corporations to claim bancruptcy and reneg on their pension plans ( which employees contributed to ) even though the corporation still had assets which they now used to sell to takeover corporations who then often used the assets to rebuid the company under an other name.