There will be an effect on consumer psychology: having now seen the Fed raise rates in 2017, and with two more rate increases considered very likely, potential homebuyers will get off the fence and into the market, in order to buy a house before rates go any higher.

“The ultimate problem is the impact of rising rates on home values,” said Stu Feldstein, president at SMR Research Corp., a mortgage-research firm. “We’re back into a bubble condition in part because of low rates that have enabled people to buy houses much more expensive than their incomes could afford.”

Banks are taking less down, but homebuyers are also paying more in monthly mortgage payments, according to the article, and incomes are not increasing at the same rate.

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While some applaud the idea of providing the option to pay less down on a home, could it be a factor that is causing the next recession, and is that recession closer than we think? 

Helping owners STOP mortgage misery at PainfulPropertySolutions.com

Those who bought their homes 8 to 10 years ago, at the height of the real estate bubble—have gained almost no equity in that time, an average of just $3,000 or 1%, said Jessica Lautz, the NAR’s managing director of survey research and communication.

Plus, many of the negative amortization loans written from 2005-2007 are now converting causing severe financial hardship to homeowners and real estate investors. I am speaking with quite a few owners whose mortgages have converted this year. One investor's payment has tripled, needless to say I am helping him sell in a short sale.

If you or someone you know is in this situation, please reach out to PainfulPropertySolutions.com

Well this seems like a good idea. Thoughts?