Here's an interesting thought: walking away from your unaffordable mortgage might actually prop up consumer spending. At least, that's the conclusion of Tom Lee, chief U.S. equity strategist at JPMorgan Securities. Via Reuters:
"In a perverse way, people who are leaving homes are actually helping the consumer spending picture," Lee told the Reuters Investment Outlook Summit on New York. "If you were under water in a mortgage, and then you walked away, you literally stop paying the mortgage so your actual disposable income goes up," he said. This may be one reason why consumer spending hasn't gotten hit harder given the headwinds of the worst U.S. housing market since the Great Depression and sweeping oil price gains, according to Lee.
Certainly an interesting theory, and a telling one: being "house poor" no longer is an advantage for many consumers. Not when they're staring at having to make up hundreds of thousands of dollars of lost property value in places like Southern California.