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Strategies & Market Trends : Strictly: Drilling II
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To: Davy Crockett who wrote (10026)3/26/2002 11:22:27 AM
From: Sharp_End_Of_Drill  Read Replies (1) of 36161
 
Svenlar,

>>>IMO only, low interest rates have triggered a refinancing mortgage boom that have allowed consumers to go ever deeper into debt.

Once interest rates start to move up, consumers will be tapped out & will probably not be able to participate... <<<

I'd add that second mortgages and home equity loans are also booming, giving that tapped out consumer his last dip into the well.

In Texas home equity loans used to be illegal, now they are common place.

I think this will take years to play out, say 2 or 3, but I think we will see a big surge in bankruptcies and foreclosures. The tapped out consumer combined with what looks like a top in the housing bubble should lead to pain for some, and better bargains for others in real estate.

Do you think the insider selling in the home builders is a good indicator?

Sharp
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