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deficit spending and the iraqi war will begin to push inflation in the coming 36 months---i predict big-time inflation.
mortgage interest rates will rise this is true---but folks who got in with a low interest rate (fixed rate) amotized loan might come out OK for the most part, because they will be paying off that loan with inflated dollars.
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True. But their main worry won't be so much the mortgage payments they are paying but the erosion of the value of their property. If there are fewer buyers coming in later to push the price of existing inventories up, the prices will begin to stagnate or even fall. This usually puts the fear into some real estate holders because they become UPSIDE DOWN on their loans -- (ie., payments are worth more than the value of the property). Hence, they sell--thereby triggering another round of price erosion.
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Originally Posted by latinasojourn
if you have an ARM you will be mostly fucked.
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These will be the first group of people that suffer. Unfortunately, even fixed rate guys will suffer as well once base property value begins eroding due to inflation-based rate changes.