The housing market & mortgages. Buying a home is going to cost more in financing. Countrywide (the nation’s largest mtg lender) is replacing selling its loans as securities with borrowing money from other banks - 11.5 Billion worth (& that sent the stock market into a deepening panic!). According to David Seiders, chief economist of the Nat. Assoc of Home Builders, in his latest market report, “ ”The net impacts on home mtg rates differed considerably across market components: rates fell slightly in the FHA/VA/Ginnie Mae market, rose modestly in the prime conventional conforming market, & rose considerably in the nonprime (subprime and Alt-A) and jumbo loan markets. We expect these adjustments to prevail for some time.” In other words, the stock market is crashing because lenders are going back to qualifying & approving borrowers for what they can actually afford! It’s no secret that foreclosures were up 93% from just a year ago (according to RealtyTrac). Another way to look at it is: - since market volatility shows there’s nowhere safe to put your money, you might as well borrow someone else’s while they’re still willing to lend!
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