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(former)FormerSanDiegan
ParticipantBG – Agreed One of the factors in recent years wrt ARMs was the abuse of no-doc loans. Not necessarily the other features of these.
BTW, I also had an interest-only ARM that originated in 2002. It is not one of the 450,000 performing loans you cite (No I didn’t default, I refinanced into a 30-yr fixed).Of course, the most important feature of those performing loans that originated from 1988 to 2002 is that the owners are likely to have significant equity, even after the steep decline of the past couple of years.
ParticipantIs this a manufactured home on a chunk of land that is leased ? Or are you purchasing the land as well ? (Big difference between the two)>
BY “manufactured” home, do you mean that it is a pre-fab or a mobile home ?
ParticipantIs this a manufactured home on a chunk of land that is leased ? Or are you purchasing the land as well ? (Big difference between the two)>
BY “manufactured” home, do you mean that it is a pre-fab or a mobile home ?
ParticipantIs this a manufactured home on a chunk of land that is leased ? Or are you purchasing the land as well ? (Big difference between the two)>
BY “manufactured” home, do you mean that it is a pre-fab or a mobile home ?
ParticipantIs this a manufactured home on a chunk of land that is leased ? Or are you purchasing the land as well ? (Big difference between the two)>
BY “manufactured” home, do you mean that it is a pre-fab or a mobile home ?
ParticipantIs this a manufactured home on a chunk of land that is leased ? Or are you purchasing the land as well ? (Big difference between the two)>
BY “manufactured” home, do you mean that it is a pre-fab or a mobile home ?
ParticipantSure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
ParticipantSure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
ParticipantSure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
ParticipantSure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
ParticipantSure, the resets of 2-year teaser rates in the sub-prime category was the initial trigger. The rest of the decline is due to “gravity.” (prices falling to levels more in line with fundamentals).
During the adjustment period (reversion to the mean) from 2007 to 2010 or so, rates declined precipitously but housing prices declined as well. Obviously the force of gravity outweighed changes in rates during that time.
The answer to the original quesiton of this thread “>1% interest SPIKE = 10% house price drop? ” is “NO.” I think we can also agree on that.
ParticipantCAR –
I agree that there are many other factors, that is my whole point. You pointed out several, including demographics and other loan conditions besides interest rates. Therefore one cannot conclude that a 1% rate increase results in a X% price decrease. (or that it necessarily automatically results in a price decrease at all).In the 2006 to 2010 time frame, rates declined in the context of declining GDP, growing unemployment, tightening of lending standards, and the gravity of market fundamentals (prices outstripped rents and incomes). It is obvious in hindsight that those factors trumped changes in interest rates.
If interest rates were to rise in the context of a growing economy, declining unemployment, and loosening lending standards, prices may or may not rise.
I am not insisting that rising rates always result in rising prices. I am simply pointing out that rising rates do not necessarily result in lower prices as borne out by the examples above.
People seem to believe in the model of an inverse relationship between prices and interest rates when in reality there is historically as much or more evidence of the opposite being true.
ParticipantCAR –
I agree that there are many other factors, that is my whole point. You pointed out several, including demographics and other loan conditions besides interest rates. Therefore one cannot conclude that a 1% rate increase results in a X% price decrease. (or that it necessarily automatically results in a price decrease at all).In the 2006 to 2010 time frame, rates declined in the context of declining GDP, growing unemployment, tightening of lending standards, and the gravity of market fundamentals (prices outstripped rents and incomes). It is obvious in hindsight that those factors trumped changes in interest rates.
If interest rates were to rise in the context of a growing economy, declining unemployment, and loosening lending standards, prices may or may not rise.
I am not insisting that rising rates always result in rising prices. I am simply pointing out that rising rates do not necessarily result in lower prices as borne out by the examples above.
People seem to believe in the model of an inverse relationship between prices and interest rates when in reality there is historically as much or more evidence of the opposite being true.
ParticipantCAR –
I agree that there are many other factors, that is my whole point. You pointed out several, including demographics and other loan conditions besides interest rates. Therefore one cannot conclude that a 1% rate increase results in a X% price decrease. (or that it necessarily automatically results in a price decrease at all).In the 2006 to 2010 time frame, rates declined in the context of declining GDP, growing unemployment, tightening of lending standards, and the gravity of market fundamentals (prices outstripped rents and incomes). It is obvious in hindsight that those factors trumped changes in interest rates.
If interest rates were to rise in the context of a growing economy, declining unemployment, and loosening lending standards, prices may or may not rise.
I am not insisting that rising rates always result in rising prices. I am simply pointing out that rising rates do not necessarily result in lower prices as borne out by the examples above.
People seem to believe in the model of an inverse relationship between prices and interest rates when in reality there is historically as much or more evidence of the opposite being true.
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