I think some of the point is the sheer number of people who are in trouble. Just like the median price can be horrible at telling people what is going on in the market, the average equity measure can be skewed and not very useful. However it can be interesting in predicting the number of people that will be able to sell if they need to and move, the number of people at risk of foreclosure, and the number of people who may just walk away.
Plus a large precentage of baby boomers are counting on their home equity to retire. How many times have you seen one of those CNN profiles that has someone as a millionare because they bought a house in 96 in the OC but have 50k in savings and are contributing 2% of pay to the 401k and want to retire by 55? They are millionares right! Millionares dont work to 65! If things go back to 2001 or earlier pricing, what are they gonna do?
This is the otherside of the RE motto “the house is the homes largest asset”, if it isnt what they want it to be, or rather NEED it to be, then they are all just like the people who lost their shirts in the tech bust.
But you are right FLU, it isnt the most insightful number.
