Tuesday, Aug 12, 2008
Prime mortgages get hit, dashing recovery prospects
CNN: Prime mortgages get hit, dashing recovery prospects
More borrowers with good credit are defaulting on their home loans, and that's going to make it even harder for the staggering housing market to recover.
Posted by mark @ 10:44 AM (416 views) Add Comment
3 Comments
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1. Nocibomber said...
Couldn't happen here, what with the high employment, low interest rates and low inflation.
2. icarus said...
Delinquencies on prime mortgages of $417k or more are higher than delinquencies on prime mortgages of under $417k, yet we read that there is a strong inverse correlation between house prices and delinquencies. Is this because sub-prime loans are put into the mix for the second part of that statement? Did it not occur to the reporter to clarify this?
'Prime' delinquencies are not surprising. I posted last year to the effect that in any asset bubble people will be tempted to over-extend themselves on borrowing (and be enabled to do so in the lending frenzy of the period before peak house prices) because the higher the value of the asset you buy the more you make when that asset goes up by the expected 20% or so.
3. plato said...
Over here we have inflated prices. The cost of living and wages have too large a differential. Costs associated with owning a property have become crippling for the average person. Everythng is taxed directly or indirectly to finance a massive government debt.
All will be OK though,because we have banned smoking and sanctioned gay clergy. The UK knows how to handle this threat. Have confidence in your leaders.