on Mar 12th, 2006Oliver Twist Visits This Old Home Equity
Busy enjoying the good life…on credit? It’s sort of like unprotected sex. You just might have to accept the fact that you’re a father or the new owner of a lifelong health condition that can, at times, produce ugly flare-ups.
The same can be said for those who run up their credit debt. You may own a house that is accumulating equity faster than dust, but don’t brush off the interest payments or you may find yourself visiting the local soup kitchen, asking for a second helping like poor Oliver Twist.
Federal Reserve data show that the value of household real estate climbed 71% over the past five years. But mortgage debt grew even faster, up 75%, as folks cashed out part of their home’s value when they refinanced or took out second mortgages.
At the same time, car loans and credit-card balances are also rising. Outstanding consumer debt is up 27% over the past five years, well ahead of the 13% cumulative inflation rate.
The Debt Bubble Threatens to Derail Many Baby Boomers’ Retirement Plans
By JONATHAN CLEMENTS
Wall Street Journal, March 8, 2006; Page D1