The folks over at SNL published a new ARM reset chart from Credit Suisse & if you’re interested in what’s in store for the Bay Area housing market, you’re going to want to keep an eye on this.
Thankfully, due to the low interest rate environment that we’re currently in, it seems as if we’ve been granted a temporary reprieve from a wave of potential defaults stemming from dramatic increases in monthly payments. In fact, many borrowers with ARMs could actually see their payments decrease.
So does this mean we’re out of the woods? …Not exactly.
1. Rates are still at historic lows and are bound to rise sooner or later.
2. Property values have fallen dramatically since the peak years and many borrowers looking to refinance won’t be able to due to fact that their properties won’t appraise.
This is something that we’re going to have to deal with before the local housing market can recover.
For more analysis, I recommend checking out: Calculated Risk: New Credit Suisse ARM Recast Chart
