NBC News on Today's Interest Rate Hike: Will Hurt Homeowners: Bubble Pop?

[Dr. Jones]

NBC Nightly News just reported on today's interest rate hike care of the Fed. They focused mainly on the effect this will have on homeowners (particularly those with ARMs) and that it will raise their monthly mortgage payments.

I wondered to myself, what is the breaking point? At what point do the interest rates go so high that the folks with no-down-payment ARM loans simply cannot afford their mortgage payments anymore, some even having to just walk away from their homes (which in some areas have been declining in value)?

You know, with increasing gas prices, increasing cost of housing and mortgages, and the downsizing of the American middle class due to insourcing/outsourcing/illegal immigration, I just wonder when we'll see the breaking point. From what I can see, we're just about there.

Will the housing bubble pop be the final straw that breaks the back of this so called "strong and growing stronger" economy? Will people really feel the bubble pop, or will life go on as usual with people simply assuming more credit card debt?

[OldLeftieLawyer]

1. It already popped

This interest rate hike will just make people go into meltdown faster, go into foreclosure faster, bankruptcy faster, and the rising gas prices are doing more to contribute to this than this new hike - which is disastrous for the American economy, I think.

I swear, this "administration" is determined to break the back of this country just before nuking Iran. I really think that's what's going on. This is insane.

[rzemanfl]

2. I'm sure you have seen the graph of the economy with and

without home "equity" borrowing over the past few years. The whole housing market since 9/11 has been a scam.

The resolution of this will make the early to mid 1980's look like a day in the park.

[OldLeftieLawyer]

4. 1980s?

Oh, I'm old, and I'm thinking 1929 was a real picnic compared to what's going on already. People don't have a clue, do they?

It's gonna be so bad, I'm not sure anyone quite grasps it.

[rzemanfl]

7. I'm limited to my experience. How could you have met K.V.

in your youth and remember 1929? Are you really Shirley McClaine?

[OldLeftieLawyer]

9. Don't call me Shirley

I remember things pre-partum, so don't ever be surprised.

[rzemanfl]

11. I remember things from when my father's testicles were maturing.

So there.

[OldLeftieLawyer]

12. You do not

You remember being in the first bowling alley.

You often got those two incidents confused when you were little. I remember trying to console you by bashing medicine balls together to distract you. That always comforted you.

[Dr. Jones]

5. They want to break the back of this country in order to

make the populace more submissive to the government? And less able to assemble and protest the new Iran war? Could be...

But the bubble already popped? I haven't heard a THING about that. Do you have any hard data or other sources that would show this? I'd be interested in seeing it. Most certainly though, yes, it will indeed make people go into meltdown faster...yikes.

That's too bad...our economy was doing so well and everyone was making so much money and salaries were so high and jobs were so plentiful...
:sarcasm:

[OldLeftieLawyer]

6. HAHAHAHAHA!

Pop this, ya trickster.

I feel so sorry for all those people who decided 100 mile daily commutes were worth the great big house WAY OUT THERE IN THE EXBURBS. Now, they can't afford the gas to make the commute.

[girl gone mad]

3. When my parents bought their house in the 80s,

rates were in the high teens.

I think rates need to go higher from here. They just aren't keeping pace with real inflation.

[Robbie Michaels]

8. It'll take more than this

I used to work in the mortgage industry and the fed hikes only control Home Equity Lines of Credit (HELOC). Most, if not all, adjustable rate mortages are based on the London Interbank Offered Rate(LIBOR) and are usually adjusted either annually or every six months. There's so many factors that go into mortgage rates it will take more than this one event to change the rate.

However, those people who have a lot of credit cards and/or HELOCs are the ones who should panic when the Fed hikes the interest rates. When that happens, the prime rate goes up and everyone feels the pinch.

[OldLeftieLawyer]

10. More than anything, though,

it's going to be the gas prices that tighten the collective noose around the throats of Americans.

Watch.

[madrchsod]

14. yes it is

i was applying to an employment agency where most of the guys said they would`t drive over 12-20 miles unless the job paid more than 10 an hour. most jobs around here pay no more than 8.50 tops to start...so no one can afford to travel to an entry level job if the price of commuting takes a large percent of what job pays. i had to quit my job because of cost of gas and other factors, that at the end of two weeks, i effectively made 50 dollars a week...
it`s fuck`n tough out here where driving to another town miles away is the only place that one can find a job...ya i live 2 miles from the home of st ronald and in this town there are no jobs at all...

[Robbie Michaels]

15. Yes

It's not just buying gas, it's the cost of doing business. The price of anything we buy that has to be shipped will increase. I'm already seeing it at the supermarket and restaurants.

[Lex]

13. ARMs have caps and usually only adjust 1% per year.

So it many cases it will not be catastrophic.

[Robbie Michaels]

16. PayOption ARMS

I think I've seen some of those loans where they adjust monthly. Although it does have that cap, that monthly adjustment has to be unnerving to consumers.

[TerdlowSmedley]

17. A lot of people will be in a world of hurt, but that won't stop all

the morons from crowing about the "robust" economy.