How to keep a global housing market boom booming.
Interesting article in the New York Times about owners refinancing with adjustable rate mortgages. $400 billion worth of this type of mortgage is resetting this year in the U.S., next year it’s set to be one trillion dollars worth.
It is the latest twist in the gravity-defying world of the high housing prices and exotic low-rate mortgages: As monthly payments on adjustable-rate mortgages are starting to balloon, many Americans have found a way to put off the day of reckoning.
They are refinancing with new adjustable-rate mortgages that keep monthly payments low — for now, that is, though their payments will likely rise even higher in the future.
I guess it will be easier to pay the full load of debt in the future?
RSS 2.0 comments feed. Both comments and pings are currently closed.
July 25th, 2006 at 9:09 am
So how long can this go on? Can you put off paying for something indefinately? I’m sure the banks are happy with that situation as long as you pay them, the amount of interest income generated over the long term must be immense!
At this rate buyers could end up paying three times the already inflated purchase price once you add up the cost of that interest.
July 24th, 2006 at 10:47 am
Are you kidding?!?
yes
July 24th, 2006 at 10:05 am
Are you kidding?!? How can you plan on having a quadrupling of income? Is your business legal?
July 24th, 2006 at 8:48 am
I don’t know about you, but I plan on quadrupling my income in the next two years. I figure this will make it easy for me to pay for anything I want to buy right now.
I just factor that quadrupling into my ‘affordability’ decisions.