I just bought quite a bit of stock in FNF because it looks like a real kicker to me. I am curious ,however, about how hard I might expect to be hit on share price when interest rates start back up. Has anyone on this board been here through a previous interest rate cycle? If so
info would be appreciated.
Mortgage loans have increased by over 500% in the last 20 years. I know its true but it's a little surprising, in that population growth, new homeowners and inflation wouldn't - at least on the surface - add up to such an increase.
Oops, the link only gets you to the index. Then just click on Mortgage Data in the left hand menu and then click on Mortgage Loans Outstanding.
Son says he's been watching the cycle for a long time. Here's a link with the dollar amount of mortgages outstanding for every year, coincidentally, since Sonny was born. They never went down, Son, always up.
MaxB, According to this link about 60% of homeowners carry a mortagage.
That means 60% of 105.5 million housing units
have a mortgage??
Thats maybe 63.3 million homes.
Not including those additionally carrying the HELOCS or seconds.
In the 1st quarter of 2003 ,
121 million housing units exist.
105.5 million if the 121 million are occupied.
72.2 million are owner occupied.
33.3 million are rented.
If I understand you correctly, you think the housing stock gets pushed into the ocean when the economy goes sour.
Let's consider a simple example. Let's say Americans own 50 million homes. Let's say 25 million carry a mortgage. Now let's assume the economy takes a radical dip and all new construction stops. There are still 50 million homes. Somebody owns them. Is it likely that a greater percentage of the population can now afford to not carry a mortgage? I think not.
<< The number of new origination go down, not the number of existing mortgages to be serviced.>>
Help me on this. What is the average life of a loan - 7 years? Loans get paid off when they mature. Defaulted loans get foreclosed. Loans get paid off when real estate is sold. Loans do not stay on the books to be serviced forever.
If the number of originations go down, what replaces the loans that are no longer there? As I said, help me on this.