Foolishly Or Otherwise, Homeowners Are Unafraid Of A Real Estate Bubble

Economists are more talented than Hollywood screenwriters at crafting disaster scenarios, and they have a favorite one these days: A combination of rising interest rates and declining real estate values creates panic and insolvency among home-owners, tipping the whole economy into chaos. For better or worse, this thesis has yet to win much credence among most people who own houses, judging from a nationwide survey of homeowners by the Los Angeles Times and Bloomberg News.

For one thing, relatively few homeowners (14 percent) anticipate a decline in house prices in their neighborhood during the next six months, while 35 percent think prices will rise.