There’s a good summary of the week’s bad housing news at Daily Kos: This Week’s Housing News — More Cause for Concern.
Foreclosure rate rises in quarter,
Adjustable rate mortgages may be beginning to indicate symptoms of rate shock. All types of ARMs had higher delinquency rates than in the first quarter of this year while fixed rate mortgage loans were either unchanged or showed a lower rate of delinquency.
This is good: US Housing Crash Continues – San Francisco Bay Area Hit Hard, “When rates go from 5% to 7%, that’s a 40% increase in the amount of interest a buyer has to pay.”
During periods of bubbly exuberance, prices can shoot up 20 percent or more a year. It’s like every homeowner is a lottery winner, drunk on dumb luck. Gimmicky instruments such as interest-only loans allow speculators to feed in a frenzy. Houses get flipped as fast as In-N-Out burgers during lunch hour.
Then, just like that, the mood changes from bubbly to flat. The flippers worry they’ll get caught upside down, owing more than their houses are worth. Buyers stand back, worried they’ll plunge in as the market heads south.
That appears to be about where we are now. In a leery standoff between buyers and sellers.