- You are inherently short the hypothetical minimum shelter requirement home— this is your future housing obligation.
- You may also be long a highly correlated actual home asset.
Appreciation of the latter is not beneficial to you when it is matched by the former. This means, for example, that you should think carefully before obtaining a HELOC against "appreciation" because you can have paper appreciation while staying equal or actually becoming worse off relative to your future obligations.
- You are inherently short the hypothetical minimum shelter requirement home— this is your future housing obligation.
- You may also be long a highly correlated actual home asset.
Appreciation of the latter is not beneficial to you when it is matched by the former. This means, for example, that you should think carefully before obtaining a HELOC against "appreciation" because you can have paper appreciation while staying equal or actually becoming worse off relative to your future obligations.