James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, commented on a paper written by a list of financial bigwigs* called “Housing, Monetary Policy, and the Recovery.”

He made two particular points of note. First, the housing bubble and its bursting is scaring a generation of Americans from buying property, and “may suggest a more permanent shift to renting.”

Second, that Americans’ high debt loads are hobbling a recovery. Not only do about 65% of homeowners carry debt, but their combined homes are only worth about $712 billion — and their debt is close to $10 trillion.

In 2005, the typical loan-to-value ratio was about 58%. Today, thanks to collapsing prices and over-borrowed homeowners, it’s at 90%.

Read more from HousingWire.

 

*Mike Feroli (JPMorgan Chase), Ethan Harris (Bank of America), Amir Sufi (University of Chicago Booth School of Business), and Ken West (University of Wisconsin)