Dean Baker asks:
The median period of homeownership in the United States is only 7 years. This means that a high percentage of the people who bought a home in 2003 or 2004 will likely plan to move in the next two or three years. If these people are already underwater in their mortgage, with house prices falling at a 20 percent annual rate, it is extremely unlikely that they will be in their home long enough to accumulate any equity. If homeowners pay more every month than they would to rent a comparable unit and still accumulate no equity, possibly facing a short sale when they move (which has the same impact on credit ratings as a foreclosure), then it is not clear how much they are being helped under the plan.
March 9th, 2009 at 9:13 am
I brought your writing and ideas up in the always interesting blog Fabius Maximus discussing just this issue.
http://fabiusmaximus.wordpress.com/2009/03/09/housing-3/