Americans are taking out the largest mortgages on record

[Eric A.]

Article on Market-Watch: https://www-marketwatch-com.cdn.ampproject.org/c/www.marketwatch.com/amp/story/guid/E5127276-1A17-11E7-8755-9AB7B5C1C318 Spoiler alert: - According to the mortgage bankers association, the average size of a home loan is at the largest in the history of the survey, which goes back to 1990. - Larger mortgages reflect not just more expensive home prices, but also more leveraged ones. - The 20% down payment is a relic. The median down payment in 2016 was 10%. For first time homebuyers, it was 6%. - First timers and other buyers of less expensive homes are now more levered than they were at the height of the housing bubble a decade ago. - Back in 1990, the median mortgage was 3.3x the median annual income; it's now more than 5x Housing definitely frothy these days. And it definitely has to do with the recent period of persistently ultra-low interest rates fueling asset valuations to reach all-time highs everywhere. Anybody concerned that the impending "Trumplation" trifecta of fiscal stimulus (lower taxes, $1trn infrastructure spending, bank deregulation) will push interest rates higher very quickly, and push housing over a cliff?

[David Faulkner]

Mortgage lending still looks solid to me ... if you want to see unsound lending practices that are about to run aground, look into auto loans:

http://www.valuewalk.com/2017/04/auto-subprime-loa...