Sky-high housing prices still threaten to complicate the Federal Reserve’s inflation fight
Borrowers already took out trillions worth of low-cost, 30-year fixed-rate mortgage debt in recent years, leaving only about 10% of the $12.8 trillion mortgage market at adjustable rates, according to the Urban Institute.
That’s good for existing homeowners, since it dulls the kind of interest-rate shocks that sparked a wave of subprime mortgage defaults from 2007 to 2009, causing home prices to plunge and exposing reckless leverage in financial markets that spiraled into a global crisis.
MarketWatch 10 August 2022
U.S. Home Prices Record High in Second Quarter
Median prices rose by double digits from a year earlier in 80% of 185 metro areas
The average rate on a 30-year fixed-rate mortgage was 5.22% this week
That is off the 13-year high of 5.81% in June well above the 2.87% rate a year earlier.
WSJ 11 August 2022
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