Even though the U.S. housing market is continuing to break records, various risks are on the horizon that could pose serious problems for homeowners in the future, according to a new Harvard study.
This analysis comes as affordability continues to be a dilemma for many Americans, the Joint Center for Housing Studies reports.
In 2004, housing markets posted record growth. Homeownership reached an all time high of 69 percent, with households of all ages, incomes, races and ethnicities joining the home buying boom. Single-family starts hit a record 1.6 million units, while new and existing home sales grew to nearly 8 million. Mortgage product innovations helped markets stay hot. Subprime loans gave millions with blemished credit records, who would previously have been denied a loan, the chance to buy a home.
Meanwhile, interest-only and adjustable rate loans are helping blunt the impact of higher home prices. Indeed, adjustable rate mortgages accounted for more than a third of all mortgage loans last year and interest-only loans for nearly one-quarter.
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