Homes Dried Up Retail Landscape
While I was sitting at my local laundromat waiting for the spin cycle to end, I picked up a past issue of the New Yorker, the March 2008 edition, and started flipping through the pages for distraction.
Although I have forgotten the title of it, I read a very interesting article about the downturn of the housing market and made a correlation between the mass foreclosures in North America with the spending habits of fellow consumers.
During the real estate boom between 1996 and 2004, borrowing credit had never been easier. Lending restrictions were lax and putting a down payment on a home was virtually non-existant. The average down payment for a home would only reach as little as 2%, leaving consumers less likely to save up for the future and spending more. This extra spending habit conveniently coupled with the rise of accessible luxury was a recipe for extravagance.
