The adjustable rate mortgages are attached to the prime rate, not the availability of new mortgages. It definitely saves these homeowners from seeing the cost of staying in their home rise ever higher, while the value of the home on the open market collapses.
I mis-spoke, I meant to say that if people were going to move from an adjustable rate to a fixed rate, then these rates cuts won't help them. While they are in an ARM, you are correct, then when the Fed cuts rates the ARM adjusts down.
You're right about that Zig. Ironically lower interest rates will encourage the ARM mortgagees to not move out of the loan. The payments won't go any higher, and the lenders will be happy to see performing loans on their books, instead of non-performing assets.
But 18 million uninhabited homes!?!??! I am sooo happy I DON'T own a home. That's a huge amount of supply, and they HAVE to move it off of their books. Also, uninhabited homes deteriorate- it's very hard to sell a home that's rat or vermin infested.
Shouldn't be too much longer before some genius decides that it's better to RENT the homes than to leave them sitting empty.
