That marks the first time homeowners' debt on their houses exceeds their equity since the Fed started tracking the data in 1945. And one valley realtor says there is a big lesson to learn.
At the annual Home and Garden show in downtown Fresno you can find it all. A specialized iron, a quiet garage door, even a free meal. But the show can also provide a window into the current economy.
Glenn Siemens, Remodel contractor, says "It's going to be a tough year- construction is down- everyone knows that at this point. But we do find people are a little more hesitant to do those kinds of things, so it's a little more difficult at this point."
One contractor says slower business means consumers have a better chance of negotiating lower price estimates. And a cabinet supplier says remodeling has dipped because people don't have the equity lines of credit.
Realtor Don Scordino says it's those equity lines that got many people in trouble. "We found out that 51% of foreclosures were due to cash-out refinances, not from people overbuying," says Scordino, Fresno Association of Realtors President.
Scordino surveyed 350 Fresno County foreclosures last year and says half were people taking equity out and many using the money for buy luxury items, not home improvements.
"The lesson learned here that we need to get back to looking at our home as a place for a family to live and not using it as an ATM machine to pull cash out of," Scordino says.
Shoppers we spoke with had a spending range. Some are focusing on smaller projects.
Rhonda O'Neil, shopper, says "Yeah, because we want to make sure we have that money set aside for a rainy day."
While the Meyers family wants to add a pool to their Sanger home. "You could go out and buy $100,000 car or Cadillac or SUV and think nothing of it. Why not invest in your backyard so you have something in the future," says Robin Meyer.
Experts say home improvements can be good, and add value to your home, however it only makes sense to do them if you have cash in-hand.
