{"id":483,"date":"2006-08-22T13:06:04","date_gmt":"2006-08-22T17:06:04","guid":{"rendered":"http:\/\/www.forgetful.ca\/?p=292"},"modified":"2006-08-22T13:06:04","modified_gmt":"2006-08-22T17:06:04","slug":"pop-goes-your-house","status":"publish","type":"post","link":"http:\/\/forgetful.ca\/?p=483","title":{"rendered":"Pop goes your house."},"content":{"rendered":"<p><strike>I<\/strike> We have no money to invest right now, with a new house and baby on the way.  But I&#8217;m still following a few select companies, watching for good value in the market, and following financial market news.<\/p>\n<p><a title=\"not the red one.\" target=\"_blank\" href=\"http:\/\/www.forgetful.ca\/www.barrons.com\">Barron&#8217;s<\/a> on the weekend had an article titled &#8220;The No-Money-Down Disaster&#8221; about the housing bubble in the USA.  Inventories of unsold houses are rising, new home starts are falling, personal debt levels are skyrocketing, and mortgage defaults are increasing.  Those are all big, scary things.<\/p>\n<p>However, the following stats sort of blew my mind:<\/p>\n<ul>\n<li>32.6% of new US mortgages and home equity loans in 2005 were interest only, up from 0.6% in 2000.<\/li>\n<li>43% of first-time home buyers in 2005 put no money down.<\/li>\n<li>15.2% of 2005 buyers owe at least 10% more than their home is worth.<\/li>\n<li>10% of all home owners with mortgages have no equity in their homes<\/li>\n<li>$2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007<\/li>\n<\/ul>\n<p>You owe more than your home is worth if your home goes down in value from your purchase price.  It happened here in Canada in the 80&#8217;s when interest rates were in double digits, as housing prices went down because mortgage payments became too expensive as mortgages were renewed at the much higher interest rates. But prices are going down for a different reason in the US.  These interest-only mortgage products have made it too easy for people to buy homes.<\/p>\n<p>We have been luckier in Canada, as our banks haven&#8217;t been as &#8220;creative&#8221; with mortgage products, and there hasn&#8217;t been the same property frenzy as there has been in the USA over the past 5 years.  But look at Calgary today and tell me a correction isn&#8217;t somewhere in their future?<\/p>\n<p>I could rant for days about this, but everyone&#8217;s eyes are probably glossing over already.  Suffice to say that I&#8217;m watching for opportunities to personally profit should the housing bubble burst &#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I We have no money to invest right now, with a new house and baby on the way. But I&#8217;m still following a few select companies, watching for good value in the market, and following financial market news. Barron&#8217;s on the weekend had an article titled &#8220;The No-Money-Down Disaster&#8221; about the housing bubble in the [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0},"categories":[30,41],"tags":[],"_links":{"self":[{"href":"http:\/\/forgetful.ca\/index.php?rest_route=\/wp\/v2\/posts\/483"}],"collection":[{"href":"http:\/\/forgetful.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/forgetful.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/forgetful.ca\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/forgetful.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=483"}],"version-history":[{"count":0,"href":"http:\/\/forgetful.ca\/index.php?rest_route=\/wp\/v2\/posts\/483\/revisions"}],"wp:attachment":[{"href":"http:\/\/forgetful.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/forgetful.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=483"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/forgetful.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}