We’re used to charts like this by now - but here are the latest, from the IMF’s Financial Stability Report, picked up by the Econbrowser blog.
So the 2006 vintage of subprime loans has already hit about a 14 per cent delinquency rate, and has yet to reach the usual 20-30 month peak point for deliquencies. The IMF adds:
the effects of previous excesses are likely to continue at least through 2008, as low introductory “teaser” rates on adjustable-rate mortgages (ARMs) reset to higher rates, and as mortgages start to amortize. Unlike previous years, borrowers experiencing payment difficulties are expected to have fewer refinancing options, since falling house prices reduce the amount of homeowner equity, while tighter lending standards limit the range of mortgages available to nonprime borrowers.
So out of options, the WSJ reports, growing numbers of homeowners are gambling on bankruptcy filings to try to stay in their homes. Consumer bankruptcy filings increased almost 23 per cent in September from a year earlier - with the increase sharper in some areas where the real-estate boom was particularly heated, especially for a type of bankruptcy that allows homeowners to halt foreclosures on their homes.
Frightening - but not as much so as this. Yorkshire Bank claims in their Halloween survey of homebuyers, that over half of first time buyers would be willing to put in an offer on a supposedly ‘haunted house’ and 30 per cent would be more inclined to view a house complete with ghostly presence out of sheer curiousity.
A worryingly high 10 per cent of people currently believe their house to be haunted. But only 1 per cent of those in the south-east would be put off making an offer on a property if they thought a black cat had brought them bad luck by crossing their path on a viewing.
Ludicrous stuff. But equally the most entertaining news we’ve seen - on housing, and from a general sanity in the UK perspective - in some time.
