I have no doubt that most of the new home purchases do represent move-up transactions for those buyers who generated equity via owning appreciating assets during the first half of this decade. However, I also see an overwhelming percentage of purchases relied upon 80/20 financing and ARMS. I take that to mean that many of those buyers had no significant equity to transfer to the new purchases. They didn’t all parlay their equity into stock purchases. I think a lot of these people just spent that equity of Hummers and plasmas.
I wonder how many of the Beemers, Hummers and Range Rovers driving around town were bought with home equity rather than actual income.
