Housing Bubble vs. Housing Market Slowdown
The central issue addressed by the April 2006 Economic Outlook issued by Freddie Mac on Monday is the conflict created between the strength of the economy and the increasing lack of housing affordability.
The report goes on to tie this lack of affordability to the growth in the popularity of adjustable rates mortgages and especially to nontraditional ARM products such as negative amortization and interest only loans. Use of these types of loans is often the only way families can qualify for a mortgage in these high cost communities. People buying homes with negative amortization loans are purely speculating in the market and they are speculating with someone else's money. This has driven the market onward and upward and pushed housing out of reach for many people in the market.
california mortgages california
1 comment:
Because it's all an effort to prevent various regional housing markets going. By continuing to offer longer terms such as the 40&50 year mortgages, they hope to sustain the equity that current owners have.
Post a Comment