[quote=bearishgurl]
No, livinincali, homes are only a “highly leveraged asset” for those fools (mostly “worker bees” at the mercy of employers) who tend to borrow themselves into oblivion to get into one. Many, many regions of the country have a VERY LARGE percentage of homeowners (over half) who owe 0 to $20K on their primary residence.
[/quote]

I said at the margin. Not all home owner are highly leveraged, but most new home owner are. Potential new home owners bidding for the available properties are the ones setting the prices. Move up buyers generally require somebody to buy the previous home unless they decide to rent it and lever up in a new purchase. If leverage was reduced and interest rates were raised then the amount one could bid on a house would be lower. Now there doesn’t necessarily have to be willing sellers at that price, but at the margin there would be some sales and prices would reflect the reality of lower leverage and higher interest rates.