Home Prices

[James48843]

This article says home prices are still way too high, and should contnue to fall for some time to come.

http://finance.yahoo.com/tech-ticker/article/52640/House-Prices-Still-Too-High-Despite-Collapse

It's worth reading.

[James48843]

And here is the REAL meat regarding all those ARMs that are going to be resetting over the next few years.

Here is a graph of the amount in dollar value of ARM resetting projections on the left, and then, on the right, the amount of anticipated "shock" those ARMs could move up if current projections hold.

4585

The story where this came from is here:
http://www.cnbc.com/id/26529207/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext% 7C&par=yahoo

According to this article, while it may look temporarily like the home mortgage crisis is bottoming out, this is only a slight reprieve and breather, before the big shock waves hit ARM holders in 2010 and 2011.


If this data is correct, we're in for some real tough times ahead in the real estate market.

[mick504]

Interesting data....I've never and would never buy an A.R.M....how often and how many times do A.R.M.'s reset?

[ChemEng]

Interesting data....I've never and would never buy an A.R.M....Not all ARMs are bad--you just have to know what you are buying. PENFED has a 5/5 ARM (https://www.penfed.org/productsAndRates/mortgages/mortgageCenter.asp) that looked really tempting when we were buying our house.

[DCguy]

ppl seem to only care much about the house prices. Yes, the prices are falling, but the mortgage interest rate's going up. 1% mortgage interest rate increase over 30 years on $100k is equal to about 35k or 35% of the original house purchase price. In 2003, I think the mortgage interest rate was only about 4.5%. Now it's about 6.5% and we all expect the mortgage rate to go up. I'm sure it will go up again to about 10% just like the last time we had the housing bubble burst. If you add up all property tax, house purchase price, and mortgage interest you pay over 30 years, you find out that the total amount of money you spend on house today will be much less than how much you will pay about 10 years later. and if you rent, you lose more.