Sorry to be so direct, CONCHO, but when I saw this I realized that even some fellow Piggs have more education ahead of them.

I didn’t mean that people were borrowing against their retirement savings, I was just referring to the fact that borrowers’ balance sheets have been drastically reduced. When you apply for a home loan, you disclose all of your assets and debts, including your 401K/IRAs, etc… Your lender will use this value, along with your income and credit history, in determining how much to loan you. The buyer who a year ago had a $300K 401K now has a $175K 401K, so lenders will not be willing to lend him as much. He’s not borrowing against those savings, but the lender is using that amount in determining how much he qualifies for. I totally agree that you shouldn’t borrow (much anyway) against your retirement savings to purchase a home.