I am back on my “collapsing housing market” bandwagon. Today’s New York Times story “Keep Eyes Fixed on Your Variable-Rate Mortgage” tells of the coming doom—people unable to pay for their homes because of risky variable-rate or interest-only loans.
The story, by Damon Darlin, reveals that nationwide, interest-only loans accounted for 26.7 percent of mortgages last year. In Washington: 40 percent!
I have repeatedly blogged about the impending housing market crisis. While not as apocalyptic as my stated position, SmartMoney story “Home Crunch” warns of problems on the coasts, where inflated home prices and risky mortgages will pinch many home owners.
In my neighborhood, signs of a sales slowdown are everywhere. Two houses around the corner have been on the market for months. A year ago, they would have sold within a week. Some houses are selling, but the turnover clearly is slowing down.