Housing Bubble ARM Reset Chart From Credit Suisse

NOTE: AS OF MAY 21, 2009 THERE IS A NEWLY UPDATED ARM RESET HOUSING CHART FROM CREDIT SUISSE

This housing chart from Credit Suisse is a wealth of information for anyone who is a homeowner, has an adjustable rate mortgage or may be considering buying a home anytime within the next five years.

The chart is an eye-opener to say the least. With this chart alone, one could look and see that the financial health of the U.S. banks will be in question for the next few years and that there will be no quick recovery from the recession. The chart shows the amount of resets for Adjustable Rate Mortgages (ARMs) of various types in the U.S. plotted against the next several years.

Some may say that a majority of these adjustable mortgages facing reset will refinance. I say to those people that you are correct: some may. But I also say that many will not be able to because rates have been held so low for so long and at some point (2010?) the Federal Reserve will HAVE to start raising rates to combat the inflation that the U.S. government has created through the oversaturation of dollars into the economy via the multiple bailouts of 2008 and 2009. So, many homeowners with Option ARM and Alt-A ARMs will NOT be able to refinance because it will make absolutely no sense. In a continuing recessionary environment with national unemployment over 10%, many will have only two options: short sale or foreclosure. Either of these options will continue to put downward pressure on the housing prices and mean a further continuation of the housing crash.