Here is a quote from a Business Week magazine article (May 30, 2005 edition) that I just came accross today:
“31 – Percentage of new single-family mortgages that were interest-only during 2004. That is up from 1.5% in 2001”.
Take a second glance at this statistic, it is not just saying up 1.5%, rather up from 1.5%. This means 29.5%, not 1.5%, more single-familly mortgages were interest-only in 2004. This is a very significant increase in highly leveraged mortgages and a serious indicator that a housing bubble is in full swing. Its just a matter of time before it bursts. This is great news for the serious investor. This means that in the near future there will be a lot of properties available on the market from people who over-leveraged themselves during the boom, just like with stocks in the dot com boom.