doctorhousingbubble.com / April 5th, 2017
Have you heard the good news brothers and sisters? The housing ATM is now back in working order. Hallelujah! Black Knight Financial Services reported that in Q4 of 2016 44 percent of refinances were cash-outs. Meaning, people are now using their homes like ATMs which flies in the face of all the house humpers who continually act as if people are acting prudent in buying crap shacks. No, people are sucking on the teat of housing mania and now they are drinking from the nectar that is being produced. This percentage was the highest level of cash-outs in the last eight years. What was happening eight years ago? The housing market was imploding in epic fashion and nearly 8 million people lost their homes to foreclosure. Many lost their homes because they took out HELOCs and Home Equity loans to live beyond their means. I have to make this point since people always forget – the vast number of foreclosures happened on traditional vanilla 30-year fixed rate mortgages.
The Housing ATM is back in business
The stock market is at record levels, housing prices are at record levels, auto debt is above $1 trillion, student debt is over $1 trillion as well, and credit card debt is going crazy. I am getting more credit offers in the mail compared to 2006 and 2007. People are once again living beyond their means on debt. Housing is now being used as a piggybank to finance HGTV inspired renovations, vacations, cars, and other non-essential spending. Many are tapping the equity buffer out.