The supernaturally low-interest rates provoked an orgy of buying and the orgy of buying bid up the prices of the houses, and as the prices of the hou… - James Howard Kunstler

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The supernaturally low-interest rates provoked an orgy of buying and the orgy of buying bid up the prices of the houses, and as the prices of the houses levitated, the owners entered another new and strange zone of hallucinated wealth accumulation using the latest contrivance: the refinanced mortgage. Re-fis allowed house owners to use their houses as though they were automatic teller machines. Say a person bought a house in 1999 for $250,000 and the house was appraised in 2003 at $400,000; that person could refinance with a substantial "cash out" privilege, converting the imagined increase of value into disposable income, which could then be used to buy [stuff like] motorboats, home theater plasma TV screens, or trips to Las Vegas. Refinancing prestidigitated an estimated $1.6 trillion for the American economy over a five-year period, and much of that "money" was deployed purchasing "consumer" goods—mostly made outside the United States. From 1999 to 2004… a third of all house owners indulged in cash-out re-fi mortgages. […] Behind every extravagant cash extraction lay the belief that at some future date, the house would be worth a lot more than the re-fi price and could be readily flipped.