Let me explain. The higher foreclosure rates means folks who should never have had a mortgage to begin with are being flushed out. Now that more and more folks no longer need to service a debt that consumes 80% of their income, they now have money that can be used for consuming goods and services. The less people servicing mortgage debts, the more velocity of money as less and less money entering the banks blackhole and into Joe The plumbers corner store, the dentist, Walmart,etc.. Notice how Credit card delinquencies have been dropping as foreclosures have been increasing. My opinion is increasing house prices is bad for the economy not good. Housing should not consume a large portion of earnings, otherwise it becomes less money moving around the economy.