What’s the average price of a home in the US, ~ 240k? How in the world do you come up with the average mortgage being 400k?
I’m a bear, but I think it hurts your argument(s) when you use unrealistic numbers. Everyone with a reseting ARM will not be hit with “rate shock”. While a significant number will no doubt be in trouble/forclosure/bankruptcy, your analysis suggesting that every single household with a reseting ARM will face rate shock is absurd. There are plenty of people who are well aware of their loan responsibilities and will be in position to make their new payments with ease.
Again, I’m a bear (my wife and I rent) but I think your analysis is far, far better when you’re being realistic. Saying the average mortgage is 400k and that 7.5M people are going to experience “rate shock” is sloppy and unbecoming of someone with your analytic and writing skills. In my opinion, of course.
