5 ms·
This is another thing people don't consider: housing is priced at the margin. One house has to sell in the neighborhood because of divorce / death / etc, and bo
by _huayra_ 4y ago
This is another thing people don't consider: housing is priced at the margin. One house has to sell in the neighborhood because of divorce / death / etc, and boom you have the one comp that everything else is tied to.
Even if they stay in their home, people over-levered on their fake housing equity through HELOCs are in trouble.
- ghastmaster 4y agoYou are very correct. HELOCs, however, are not as big a factor as they used to be. They will become more popular though. Wolf Richter shows some nice graphs in the article linked below. He states that mortgages in Q2 were $11.4T and HELOCs a mere $320B. https://wolfstreet.com/2022/08/04/trip-back-to-reality-starts-mortgages-helocs-balances-delinquencies-foreclosures-in-q2/ https://wolfstreet.com/2022/08/04/trip-back-to-reality-start...
- bushbaba 4y agoLow rates meant that people could cash out refi at lower rates. Don’t forget there’s a small but still notable number of homeowners with ARM mortgages.