Home Prices Snowball

Most amazing and most worrisome to me is the changing balance of equity and debt supporting the U.S. housing market. In 1998 the U.S. residential housing stock totaled $8 trillion supported by $2.5 trillion of debt, in other words, a 31% debt to value load.

Ten years later, our housing stock is $19.7 trillion (October 2008) supported by $10.6 trillion, or a 53% debt load. Debt load, or more like a giant margin call! And a margin call it is. This is what happens when the capital markets meet the real estate markets--it's payback time.

Home Prices Snowball - Forbes.com