[PEN-L:33268] Re: RE: Re: How Much Housing Credit Is Too Much?

[Doug Henwood <dhenwood@xxxxxxxxx>]

Devine, James wrote:

> but how much have mortgage payments risen as a percentage of
> personal disposable income? after all, interest rates have fallen
> and refinancing is the big trend these days.

The decline in the interest burden from refinanced mortgages is a
surprisingly small number. Most refinancings these days involve
taking cash out of appreciated equity, which adds to principal.
Goldman Sachs estimates that cashouts are as high as 4% of DPI.

Doug