Housing Chains :: home :: Hello iPhone
* Fear Real Estate *
comments
Thanks to patrick.net, I'm scared out of my wits of buying real estate in the short term...here's a nice quote on MSNBC of why:
"If you're searching for a catalyst, you don't need to look any farther than the hybrid ARMs. According to Fannie Mae (NYSE:FNM), in 2006, the teaser rates disappeared on about $300 billion worth of mortgages. But in each of 2007 and 2008, $1 trillion in mortgages will reset -- roughly 12% of all mortgages each year. Furthermore, borrowers have to adjust to more than just the loss of the teaser rates. Market rates are higher as well. Some borrowers could see interest rate increases of 4%-5%, causing a huge spike in their monthly mortgage payments.The results could be catastrophic. The virtuous cycle that pushed up housing prices and allowed consumers to increase leverage and spending on the way up could turn into a vicious cycle on the way down. A housing crash could hurt the entire economy, and not just through job losses. If 5%-10% of consumer spending is a direct result of people borrowing equity in their homes, that money could quickly dry up."
Holy CRAP! 12% of the mortgages in 2007 and 2008 will reset?!? With prices dropping and mortgages resetting, many who will try to refinance will be out of luck. Get your down payments ready, lady and gents....it's time to go fishing.
Profit From the Housing Bust - Motley Fool - MSNBC.com
UPDATE: One more scary stat:
Almost 60% of all new home purchases in the past decade were made using more than 80% financing and at least 40% of the ten trillion in outstanding mortgage debt involved stated income-stated asset loans or 100% financing using option ARM loans – loans that don’t amortize but carry negative amortization clauses in the note.
Post Your Comments (scroll down). Jump back to archived comments or the top.
2008EuropeTrip
4815162342
AdobeIllustrator
AdobePhotoshop
AdobePremiere
AJAX
Amazon
Amtrak
Apple
AroundTown
ArtDesignPhoto
ASP.net
Backup
Berkeley
BlackFriday
Bloglines
BlogTech
Books
Buddhishm
Business
Camping
China
China2004
Cinema
Commute
CoolTechnology
CSS
Culture
Customers
DailyLife
DeepInCode
Diabetes
DIY
Drupal
EastBay
Education
Energy
Entertainment
EVDO
ExcelTips
F'edUpToys
FamilyandFriends
Fashion
FireFox
Flickr
FoodandDrink
Fraud
FreeStuff
Fun
Funny
Gallery
Games
GoogleDocs
Halloween
Hardware
Hawkers
HipsterPDA
HomeStuff
HongyunArt
HuntingBeauty
InfoViz
InterestingWebsites
InTheNews
iPhone
iPod
iTunes
Japanese
Javascript
Lego
LifeHacks
LinkedMe
Linux
LongTail
Mambo
Mapping
MBA
Microsoft
MobilePhones
MoneyMoneyMoney
MovableType
MSNSearch
MSNSpaces
MusicFromCommercials
Nintendo
OfTheDay
OpenOffice
OpenSource
Organizing
Origami
Outdoors
Outlook
Paypal
Phishing
PlugIn
Poker
Politics
PPC6700
PreFab
PSP
PVR
Rabbits
reBlog
ReverieSoundRevue
Robots
Ruby
SanDisk
SanFrancisco
SanFranisco
SansaConnect
Science
Shoes
SiliconValley
SiteUpdates
SmallWorld
Society
Sony
Spam
Spoof
SQL
StarWars
Stupid
Sustainable
Sustainale
TEDTalks
TestDrivenDevelopment
Thailand
Thailand2003-2004
Thanksgiving
Travel
Tshirts
Tutorial
Ubuntu
Vista
VisualStudio
Vlog
VroomVroom
WebDesign
Wii
Wiki
Windows
WindowsLive
Wireless
Xbox
Yahoo
YouTube
ZING
Zune
