In today’s edition of The Wall Street Journal (which I read online if you are following my Are Newspapers Dead? series) there is an article entitled “More Trouble in Subprime Mortgages” by Vikas Bajaj discussing an industry report by the Mortgage Bankers Association tracking increasing numbers of foreclosures on subprime loans in California and other states. More newspaper articles predicting the “bursting of the bubble” are sure to follow.
More importantly for real estate in Palo Alto and the surrounding communities, the report also found that the delinquencies don’t seem to be extending to the bulk of the housing market where buyers have stronger credit ratings and are more able to cope with rising interest rates.
While interest rates continue to be historically low, with current rates below 7% for non-conforming (over $417,000) loans, they are still up by about .25% over the last couple of weeks, which results in an increased payment in the 4% range or roughly an extra $25,000 a month for a typical home in Palo Alto (note the use of sarcasm).
Please follow the link above to view the article in its entirety in its natural habitat, or click here.
Thanks for reading . . .
Tags: bay-area-real-estate, Loan Application, Preapproval, Prequalification, Real estate
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