I wrote an article yesterday about adjustable rate mortgages comparing them to a fixed rate mortgage and the number of foreclosures. CNN posted a new article today detailing the effects of what is going to happen when the ARMs reset their rates.
From the article:
The result: increased foreclosures and forced sales, flooding the market with homes and depressing prices even more.
“There will be a huge glut of houses that will be coming on to the market,” said Schiff.
The people who have ARMs are surely affected, but what about the rest of us? With a slow housing market already, a flood of new houses will again depress prices. Will we be able to get out of this hole?