Bond Outlook [by bridport & cie, December 21st 2005]
What happens when the “mewing” stops? (MEW = mortgage equity withdrawal). Stop it must as house values top out in the USA. In fact, it may have already stopped: mortgaging is as active as ever, but for purchasing, not taking out new loans on existing property. Thus the housing bubble in the USA is deflating in two steps: first, the source of extra borrowing by mewing is ceasing, second, the attraction of secondary residences and houses to let will fade. |
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