Housing busts are worse because more people are affected. That is the point I made above, including the data on recessions and the amount of higher consumer spending due to housing price increases vs stock price increases.
US residential mortgages total $ 10 trillion. 20% of that is adjusting next year, according to moody’s.com. I quoted 25%, because the percentage is much higher in San Diego, probably on the order of 40% or higher.
” The Saturday WSJ reports that “More than $2 trillion of U.S. mortgage debt, or about a quarter of all mortgage loans outstanding, comes up for interest-rate resets in 2006 and 2007, estimates Moody’s Economy.com, a research firm in West Chester, Pa. Let’s repeat that number: Over the next 20 months, more than two trillion dollars worth of adjustable rate mortgages will reset at higher interest rates. ”
March 2006, The Big Picture http://bigpicture.typepad.com/comments/2006/03/coming_soon_mor.html
