From the article:
Quote:
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The resulting loss in financial flexibility is significant. “Homeowners who had counted on using their home equity to finance their retirement, cover tuition costs, start a small business, or pay medical bills in many cases no longer have this option,” the report said.
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While it's unfortunate that prices are dropping due to foreclosures, I think the bigger issue is summed up by this statement here. We have become far too dependent on the equity of our homes. We've over-leveraged that asset with the expectation that homes will just continue increasing in value and while that may be the case over the long term, there will be ups and downs over short periods. Everyone just needs to get back to being a little bit more conservative with their finances and lifestyles. Very few of us truly understand what it means to live within our means.