No. of Recommendations: 1
Edy I don't think it's the actual price of a home, but rather the monthly payment.

Isn't this exactly the thinking that got us into this fix?

It doesn't matter what you pay for the house because it will be worth more later. All that matters is the size of the monthly payment.

In terms of toxic debt, I think what matters most is how many mortgages are underwater. Many people will walk away from their mortgage if they owe more than the house is worth. As long as this is happening, prices will fall and more mortgages will go underwater. Vicious cycle.

Peter
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