Affordable Housing At All Time Low In Spite Of Record Market

"This year’s State of the Nation’s Housing report from the Joint Center for Housing Studies cautions that creative financing is adding to risk. Although interest-only and adjustable loans can initially save a typical home buyer hundreds of dollars in monthly payments, these loans also leave borrowers vulnerable to sharply higher payments when interest rates adjust or principal payments start to become due. “With the number of borrowers vulnerable to payment shocks up, default rates predictably several times higher for subprime than prime loans, and house prices growing at such rapid rates, the housing market could deteriorate if the economy softens or if rates increase sharply,” explains Retsinas."