American home owners have used the equity in homes to finance upgrade to larger and well appointed homes, finance toys including SUV's, boats, and the list goes on. It's been quite a ride, but the piper must be paid.
Now that home appreciation has flattened out in most markets I note that mortgage lenders continue to promote refinancing while the chickens are coming back to roost for homeowners who unwisely selected refinancing packages including interest only (negative amortization, adjustable rates, of course), pre-payment penalties and other costs that are currently fueling the marketplace with distressed homes. Distressed homes are not limited to those who utilized sub-prime lenders.
From what I've read recently, the U.S. home building industry is looking for a bleak market until 2011. Sadly, real estate is cyclic and looking at another four years of a distressed market for existing home sellers and home builders alike will take a toll on the American economy.
Add to that the escalating costs of fuel for our must have vehicles we can only hope that when the cycle corrects and starts up again that the home building industry will indeed design "GREEN" and offer solar panels to make the next generation of housing more energy independent of fossil fuels as we convert our transportation mode to independency of imported oil.
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