Interesting analysis regarding the ratio of US housing stock value v. mortgage value via Barry Ritholtz and his econ blog: The Big Picture
http://www.ritholtz.com/blog/2010/07/the-4-trillion-dollar-question-2/
Some highlights:
Since the US housing market has declined significantly from its peak (in terms of home price value), but mortgage value outstanding has not, we are looking at ridiculously high collateral to loan rates (.62 v. historical average of .4; putting the average loan to value at 1.5x too high)
24% of US mortgages are underwater with another 5% being close.
More than the negative equity effect, strategic walkaways seem to be influenced more highly by movements in interest rates.
Cool stuff as usual from Mr. Ritholtz.
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