Housing Bubble Collapse? Most people think it will happen, but not to them.

Whether we’re at the popping off point of a housing bubble or not, we may have turned a corner in our long-standing love affair with debt.

Housing Bubble

According to the latest Experian-Gallup Personal Credit Index survey, 71% of consumers say it is likely that a housing bubble and collapse of prices could occur in the United States within the next year.

But most people don’t think it’s going to happen to them – 60% of all homeowners say they still expect home prices to rise in their areas in the coming year. Only 32% expect the collapse of a housing bubble within their own area in the next year.

About half of all Americans, 53%, recognize the term “housing bubble” without explanation — up from 35% a year ago.

However, the stats only prove that the media hype that has surrounded real estate in the last year or so is working. It’s not really evidence that a housing bubble even exists.

Borrowing Less

Over the next six months, just 2% of all U.S. homeowners plan to borrow against the value of their house either through a home-equity loan or line of credit.

And only 2% plan to refinance their current mortgage, a process during which they might also extract cash from their equity.

The evidence, at least in the Experian-Gallup survey, points to a growing aversion of households to take on new debt of any type.

Only 15% of consumers in the Experian-Gallup survey say now is a good time to borrow more money, down from 20% just a month ago.

Source: MarketWatch