I know what interest rates look like now. I also know what interest rates look like after the lenders and investors get hammered for a few years, ’cause I’ve seen it up close. How many good loans do you suppose a lender has to make in order to break even after a single $200k loss on a foreclosure?
By the time this thing is is over I think we’ll be lucky if the interest rates are below 7%. It’s not that hard to imagine an 8% mortgage interest rate. We’ve been past 10% before and based on my memory of what was going on at the time I’m seeing a lot of similarities between then and now.