The former may be more likely to be sustained, given the tendencies of discount factors to revert back to historic norms. Moreover, it is evident that borrowings against capital gains on homes influence consumer outlays beyond the effects of gains from financial assets.
Preliminary work at the Federal Reserve suggests that the extraction of equity from housing has played an important role in recent years. However, stock market values and capital gains on homes are correlated and, hence, their separate effects are difficult to identify. This is an area that clearly warrants further examination.