America's Roaring Housing Market

It is all very reminiscent of the fever of the "new economy" stock market in the late 1990s. Today, housing has replaced tech stocks as the hot way to accumulate wealth for the some 70 percent of American families who own homes, the result of an 11 million increase in households that own their own homes since 1993. Given our low interest rates and the jump of about 50 percent in all home prices over the past five years, it has been possible for many Americans to turn their home ownership into cash machines, through equity loans or mortgage refinancing, at a time when the stock market has been languishing. Last year, Americans took out about $225 billion of their home equity, and even more in 2002 and 2003. Half of that was saved, and half was spent.

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