Sunday, September 4, 2011

Dark Lining In Mom's Good Home Insurance News

My mother shared good news with me yesterday when I sat down with her at the dinner table. She reported that her home insurance premium had fallen $300 or 30%.

I asked her why the premium decrease, and she said because the value of her home had fallen 30%. A dark lining indeed in the piece of good news. My mother's home value reflects almost perfectly the national average decline in home values of about 30% since the peak of real estate prices in 2006.

Deflation in home values is an anchor dragging the US economy toward shrinking GDP and near zero inflation. How austerity economics will do anything other than make things worse mystifies me.

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