Fannie Mae has a report called Bersons that has excellent charts on housing and ARMs originations data. The impact of the higher rates on ARMs can start to be visualized. Page 12 shows ARM share of loans, and hybrid ARM share of ARMS.
fanniemae.com
The sticker shock (that gets added to all the other costs, building energy or otherwise)is rapidly evolving on 3/1 hybrids taken out in the mortgage boom of 2002-early 2003, and of course on all one year adjustables taken out then and since. The final data point is to gauge the number or level of "toxic" subprime one year adjustables, especially in Bubble real estate markets. Using a 2.75% margin this is what sticker shock for homeowners looks like right now, just add a year to each old date. These indexes are also the most commonly used for hybrid ARMs too. You can see the tsumami really starting to roll in as of Nov, 2004, so there shouldn't be too much of a lag for that to filter through into trouble, with even bigger waves rolling over, if rates continue to trend higher: big trap for people, nice job Easy Al:
Toxic variables (help appreciated on developing this data):
1. One year and 3/1 hybrids taken out in 2002-2003
2. Subprime borrowers/owners
3. Very low equity to "value" owners
4. Bubble locations
5. Investor owned (translate speculators), vacancy rates
1-year CMT, 1 year LIBOR
(set first Friday of month) (set last day of month)
March, 03: 3.99 4.09
April, 03: 4.02 4.11
May, 03: 3.93 3.97
June, 03: 3.76 3.95
Jul, 03: 3.87 4.03
Aug, 03: 4.06 4.22
Sept, 03: 3.99% 4.04
Oct, 03: 4.00 4.21
Nov, 03: 4.09 4.24
Dec, 03: 4.06 4.21
Jan, 04: 3.99 4.21
Feb. 04 3.99 4.11
March, 04: 3.94% 4.09
April, 04: 4.18% 4.56
May, 04: 4.53% 4.82
June, 04: 4.87% 5.22
July, 04: 4.85% 5.21
Aug, 04: 4.77% 5.05
Sept, 04: 4.87% 5.19
Oct, 04: 4.98% 5.28
Nov. 04: 5.25% 5.71
Dec. 04: 5.42% 5.85
Jan. 05: 5.57%
Based on latest weekly on Jan. 14th CMT would be 5.59%,
federalreserve.gov
and LIBOR would be 5.97%.
libor-loans.com
Payment (P&I) differences on a $266,000 mortgage:
4.25% $1,315 a month
6.00% $1,595 a month |
