Taps Coogan – June 13th, 2022

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As the following chart from PPG Macro highlights, the number of homes under construction in the US has surged to the highest level on record right as the number of home sales starts to roll over.

The adjustable rate mortgages (ARM) that greatly contributed to the Housing Crisis are less common today than in 2008. However, their use is rising rapidly as they provide a (pretty small) discount relative to spiking fixed-rate mortgage rates. ARM mortgages now represent 19% of the dollar value of the mortgage market, up from just 3% at the start of the year and are getting uncomfortably close to the 45% on the eve of the Global Financial Crisis.

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